LOCAL GOVERNMENT, PLANNING AND LAND (No. 2) BILL

HL Deb 05 August 1980 vol 412 cc1331-77

2.50 p.m.

The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin)

My Lords, I beg to move that this Bill be now read a second time. This is the third occasion in as many months on which it is my part to propose a Second Reading, and perhaps I may be allowed to say that each time I move further onto my home ground. It is a difficult area. Local government in England and Wales will spend about £20 billion this year. It operates services which range from the provision of public housing and education, to the licensing of theatres and pleasure-boats. It has always been vital that local government be effective and efficient. It has never been more important than it is today.

It has always been the practice not to fix a rigid and inflexible boundary between central and local government, but to allow the borderline to develop naturally, in the course of a continuing relationship. It has however been plain for a long time to those active in local government that this all-important relationship needs improvement. It has worked well enough, and it does not need a radical overhaul, but it could, and should, work better.

Today it needs a substantial change of emphasis, and that is one of the key purposes of this Bill. The Bill will do away with unnecessary intervention. It will foster accountability. It will stimulate efficiency. In short, it will significantly improve the statutory context that governs local authorities. Local government, like other parts of the public sector, has before it a challenging task, not to say a key role, in contributing to the country's economic recovery. The Government are committed to providing all the help that they can towards meeting that challenge, and this Bill is a major contribution.

It begins, in Part I, by attacking the problem of over-government. Last year's White Paper on controls identified about 300 which could be relaxed or abolished. Clause 1 of the Bill and Schedules 1 to 6 deal with the lion's share of those. More is accomplished in the miscellaneous clauses at the end of the Bill, and in the schedules which deal with planning and land. This is an earnest of our determination to leave local government to get on with their job, to stop multiplying work unnecessarily, and to cut down the occasions for delay.

But, my Lords, it is only a beginning; there is more to come in other legislation. We have cut down drastically on the traditional, grandmotherly circulars. In the 12 months ended 30th April 1980, Government departments issued 654 circulars and other communications to local authorities in Great Britain. The figure for the previous 12 months was 1,873. We are looking at other areas to see where we can lighten the load. But most important in this context is Part VIII of the Bill. Local authority capital expenditure at present is subject to a confusion of ineffective, misdirected and time-consuming controls.

Part VIII provides for a new system to enable central Government to ensure that total local government capital spending each year is consistent with national expenditure plans. But as a quid pro quo central Government will back off from detailed involvement in local capital spending decisions. From 1981–82 under Clause 63 each local authority will receive capital allocations for each major spending block, such as housing or transport.

However, more significantly, the local authority will be able to aggregate these allocations into a single block and, except for projects specified as of national or regional importance, under Clause 64 will then decide its own priorities for expenditure. The authority will be free to finance expenditure up to this aggregated limit as it wishes. It will also be given further headroom by Clause 66, through freedom to use its accumulated capital receipts, subject very broadly to a 30 per cent. limit on housing capital receipts; and, under Clause 68, through virement of allocations with other authorities. Part VIII will offer authorities, for the first time, a genuine freedom in capital programming, thereby also ending the present practice of having to submit individual projects for approval by Whitehall. Taken together with our other relaxations of controls, it represents a major disengagement by central Government.

But freedom has its counterpart: accountability. Sometimes even some councillors find it difficult to discover what is being done in their name. Local authorities and their ratepayers need to be quite clear about who is doing what, where, and how and what it costs, and who pays for it; otherwise, all decisions, especially about resources, are meaningless.

Clause 2 of the Bill is most important in this field. It concentrates on accountability, through the publication of information. It is hard for councillors, let alone ratepayers, to judge how well authorities are doing, unless they have basic information about performance. And it is important not only to be able to compare one authority's performance year on year, but also to be able to compare its performance with that of others.

There are always difficulties in comparing one organisation with another, and some comparisons may indeed be misleading. I know better than most that local situations differ, but that is no reason for not having meaningful comparisons. We have won half the battle when we know which questions to ask; and that is where basic performance information is invalu- able. Together with the professional bodies concerned—the Chartered Institute of Public Finance and Accountancy and the Society of Local Authority Chief Executives—we have devised a draft code of practice to govern some of the information to be made available under this clause. Copies of this draft code have been in the Library since the end of June.

In addition to its provision for a code of practice, however, Clause 2 also gives power to the Secretary of State to make regulations, if that proves necessary, to ensure that every authority attains at least a minimum standard.

Clause 2 by itself is not the answer to all problems of accountability. For example, there have been doubts for some time about the effectiveness of accountability in the particular field of direct labour organisations. Part III of the Bill will put this to rights. Its provisions are based upon the CIPFA Report of 1975. It provides for separate accounts to be kept for direct labour organisations, for the regulation of tendering procedures, and for a reserve power whereby the Secretary of State may, in the last resort, close down loss-making and inefficient DLOs. It is no longer good enough for local authority construction and maintenance work to be lost in the rest of the accounts. Where there is the option of going to the private sector, the cost and benefits need to be clearly spelled out. It has hitherto been far too easy for the facts about inefficiency, waste and poor performance simply to be blurred in the accounts, and this cannot be allowed to continue.

The three clauses in Part IV of the Bill have been widely welcomed. They tidy up anomalies in the arrangements for the payment of allowances or expenses to councillors and water authority members. They permit councillors the choice between the conventional attendance allowance for approved duties and a financial loss allowance; and they provide for special responsibility allowances to the most heavily committed councillors, such as chairmen of committees.

Part V deals with rating. As noble Lords will know, the Government are at present undertaking a review of local taxation, our aim being to move away, when other objectives permit, from the present system of domestic rating. In the context of this review we could not justify proceeding with the revaluation of all rateable hereditaments scheduled for 1982, and in Clause 23 of the Bill we are taking powers to order revaluations in future by statutory instrument. Cancellation of the planned revaluation will enable us to save nearly 1,000 permanent and 400 short-term posts in the Valuation Office, and will be an important contribution to the reduction of bureaucracy.

While we await the results of our general review of rating, however, there are a number of areas in which the present law needs improvement. The current empty property rating system has become too onerous and needs to be modified. Domestic relief can be made payable to more mixed business and domestic hereditaments; and small businesses can be given the right to pay rates by instalments. All these and a number of other useful improvements are made by Part V.

Part VI of the Bill contains our proposals for the reform of the rate support grant. Let me say at once, categorically, that these do not mean, as has been claimed, the end of local democracy as we know it. I would be concerned indeed if I thought such criticism was well founded. It is not. Much has been written, and more has been spoken, but I believe that a great deal of the criticism of the block grant proposals is based on misunderstanding. In 1980–81, the rate support grant for England and Wales will amount to around £8 billion—a great deal of money. But the present rate support grant system is inequitable and unfair; it assumes that spending equals need; it provides no incentive to economy; and it spreads a cloud of obscurity over the financial relationship between national and local government. The way in which "stepwise" multiple regression analysis of total local government expenditure has been used to assess expenditure needs has hitherto rewarded high-spending authorities with ever more grant.

The operation of the resources element where grant depends in part upon the actual rate poundage set does the same. Worst of all, it enables high-spending authorities to increase their share of grant at the expense of other authorities. An authority which seeks to keep its expenditure within sensible limits thus gets less grant; and at the same time it has to stand by and watch the higher spenders helping themselves to an even bigger slice of the finite cake. As the high spenders slice of grant has gone up, the prudent spenders grant has been reduced.

Can anyone really seek to justify the perpetuation of a system like that? It seems ironic now, in the light of the protests about block grant, that many authorities made just this point when the old system was flourishing. They complained that the only way authorities could prevent their slice of the cake from dwindling to a few crumbs was to start putting up their expenditure as well. Those authorities were right to complain. A grant system that provides only one incentive—to increase expenditure—and which punishes those who hold expenditure down, to me represents an odd sort of freedom.

The block grant provisions in Clauses 46 to 49 and Schedules 7 and 8 to the Bill are designed to restore some equity to the grant distribution. Not all, by any means, but many people in local government have been and are still anxious about block grant leading to more central control. Many fear how a future Labour Administration might use such a system. I would share their fears if block grant was itself a device to enable central Government to curtail what local authorities can spend. It does not involve Whitehall in telling local authorities what to spend. Block grant does not mean cash limits on what authorities spend. Block grant does not involve a statutory ceiling on rate increases, although it has to be said that there are many ratepayers who wish that it did. Block grant is certainly about discouraging overspending, but basically it is about the distribution of grant, to try to equalise the resources and needs between all local authorites, so that they can provide roughly equivalent services to their citizens.

What the new grant system will mean is a much fairer deal, both for local government and for the community at large. Authorities will not be able to count on a constant rate of grant on their expenditure, regardless of the extent of that expenditure. As expenditure increases beyond a certain point, the Government's grant contribution will taper off. If an authority wants to raise more money, it will have to raise it from its own ratepayers and justify to them the reason for so doing. Thus, the ability of a minority of high-spending authorities to inflate the expenses of the majority will be curbed. This will all be done openly and subject to the specific approval of Parliament—a far cry from the present system, where substantial amounts of grant are clawed back from local authorities, effectively by civil servants in Marsham Street, with no reference to Parliament whatsoever.

The block grant provisions cannot come into effect before the next financial year, so Clauses 41 to 43 provide for transitional arrangements to hold for the increase order this November, to ensure that authorities which refuse to moderate their expenditure cannot scoop the pool of grant in the final year of the old system. I say again that there has been much mis-leading talk and there still is much mis-understanding over the financial provisions of this Bill, and I hope that what I have said today may make the position clearer, not least for the general public. Having served in senior capacities in local government for many years, I say without equivocation that the present system is crying out for reform. Both on block grant and on capital expenditure, the Bill steers a better path between the national and strategic duties of central Government and the local and tactical responsibilities of local authorities. Irresponsible councils must have the national interests brought home to them, but I believe that responsible councils—and unquestionably that means the majority—will come to welcome these provisions.

The search for efficiency goes hand in hand with a number of things I have already mentioned in discussing earlier parts of the Bill. Many are brought out in Part IX, which deals with planning. The avoidance of over-government is not just a matter of central controls, although a fair number of these are relaxed in Schedules 11 and 12; and in the case of planning, processes are in many ways just too cumbersome and bureaucratic in themselves. The purpose of planning is not to frustrate or get in the way of development. It is to reconcile, ideally if possible, and by compromise if not, conflicting demands on and policies affecting land use in a small crowded island which needs to protect its countryside and wildlife, promote its agriculture, improve its housing and social and leisure facilities, and regenerate its industrial base. It is a difficult enough task, but it is absolutely essential to our way of life.

We believe in these objectives, and we believe in planning. We also believe it right that those who stand to gain directly from planning decisions should contribute to the cost of making them. Clause 76 provides for the introduction of charges for planning applications. We must not allow inefficient procedures and processes to clog up development. That does nothing to serve the need for new homes, or factories, or whatever. Decisions must be taken expeditiously and with regard only to what is material. An overdue decision is invariably a bad decision, as is one that fusses over unnecessary details, because jobs, homes, investment and output are thereby delayed, or made unnecessarily expensive.

My Lords, we must achieve the sort of climate which will enable local government to work as efficiently as possible. This means cutting out unnecessary and wasteful duplication. Clause 75, which rationalises the planning functions of county and district councils, seeks to do precisely that. The duplication of functions has meant cost, frustration and confusion, confusion has meant delay and delay has meant waste and dereliction. This sad progression cannot be allowed to continue.

This Part of the Bill will also unclutter other parts of the machinery of planning. Statutory plans form the basis of development control decisions, but the old style development plans are all too often hopelessly out of date. Moreover, the delay in the preparation of structure plans has held up the adoption of local plans, which are needed in areas of substantial development. Clauses 77 and 78, with Schedule 11, will bring an urgently needed flexibility into the procedures for the preparation and adoption of statutory plans. This will give developers a better idea of the kinds of development for which planning permission is likely to be forthcoming, and help again to speed up the development control process generally. I hope that these provisions, together with the important reforms we are making in practice within the Department of the Environment, will bring about a more fruitful and stimulating contest for land-use decisions.

Part X of the Bill attacks the same problem from another direction. It will increase the accountability, both of local authorities and of other public sector bodies, in their use of land. These clauses, Clauses 82 to 89, together with Schedule 13, empower the Secretary of State to designate areas where publicly-owned land that is under-used may be recorded in a register, to require information about such land and to direct, under certain conditions, that such land he offered for sale. These proposals will not he widely applied, at least in their initial stages. However, they may well come to be useful in speeding up the disposal of land hoarded in the public sector, and in making its whereabouts known more readily to those likely to develop it or to use it better.

The Community Land Scheme, as noble Lords will be well aware, has been a dismal failure. It has resulted in an enormous bureaucratic apparatus to negligible effect, creating confusion and uncertainty in the land market. Understandably, a great many local authorities simply ignored it. Clause 90 with Schedule 14 repeals the Community Land Act. This will save over £50 million a year and will free both local authorities and builders to get on with their proper jobs. There were in the Act, however, one or two provisions which were worthwhile in themselves and which need to he retained. Local authorities have always provided a certain amount of land for private development, and they have a valuable role in helping with site assembly and with unlocking land, by buying out owners who are blocking access. To do this effectively, they need clearer and simpler powers of land acquisition than they have at present under the Town and Country Planning Acts: Clauses 80 and 81 will provide them. And in Wales, where special circumstances have been shown to exist, Clauses 91 to 99, with Schedules 15 to 19, will ensure that the successful Land Authority for Wales will continue to operate, though with narrower terms of reference, more in keeping with the proper role of the public sector.

Authorities will thus still have the necessary powers to assess the need to acquire land for disposal and to meet that need. They will, of course, have to weigh the resources they are prepared to devote to it against the requirements of their other services. But at least they will be freed from the nonsenses of the special Community Land Accounts, and will know that they will get the profits—and risk the possible losses—of their land dealings. The other clauses in these Parts of the Bill are largely associated or ancillary provisions.

My Lords, our concern that land should not go to waste extends beyond local authorities—the new town development corporations are major landholders. But the creation of a new town is a lengthy undertaking, and sometimes national needs vary while it is done. This has happened over recent years, and was recognised by the former Administration in their reduction of the population targets of the latest generation of new towns. We endorse that judgement, but we cannot sec land going idle, that is enclosed in designated areas, now too large for the new targets. Furthermore, we recognise that there are developed areas in many of the towns where no further purpose is served by the public ownership of land. Here, a valuable contribution can be made by the sale of offices, shops and factories to the private sector. Clauses 116 to 118 accordingly make possible the reduction of new town designated areas. Clause 115 extends powers for the disposal of land, and Clause 114 provides for the proceeds to be payable to the Secretary of State, where he so directs. This will allow the proceeds to be used either in other new towns where development is continuing, or simply to contribute to the reduction in the public sector borrowing requirement. The remaining clauses and schedule in this Part of the Bill, will make a number of minor amendments of the New Town Acts.

The success story of the new towns, my Lords, reveals that circumstances exist where development is needed, yet where the magnitude and complexity of investment required is so great that the initiating and guiding hand of a single-minded agency is demanded. This need not only be on green-field sites. It can, as well, be alongside existing communities, as at Peterborough or Northampton. The most intractable problems of the physical environment in this country are to be found in the London and Merseyside docklands. Successive Governments have not found a solution to their problems, and the enthusiastic efforts of the local authorities in these areas have not, unfortunately, been crowned with great success. It is here, pre-eminently, that the kind of agency that has achieved so much in the new towns is desperately needed; it is here that only a dynamic unit, with concentrated vision, will be able to take the unambiguous initiatives which can arrest the cycle of decline. It is that kind of agency which is represented by the urban development corporations, to be established by the next Part of the Bill. Noble Lords familiar with the new towns legislation will recognise how closely Clauses 121 to 151 and their associated Schedules 23 to 27 are modelled upon it.

They empower the Secretary of State to define, by order, urban development areas; to establish, by order, corporations for the regeneration of those areas, and to provide, by order, that public land in any such area shall vest in such a corporation. There is no provision for a public inquiry such as takes place at the designation of a new town; but the interests of private individuals will be satisfactorily protected by parliamentary procedure—in particular by scrutiny by a Select Committee of this House.

My Lords, it is the Government's intention to establish these urban development corporations only for the London and Merseyside docklands, areas with physical barriers to development on an incomparable scale, now sadly decayed, yet of enormous potential, which await only a determined developer. These corporations will supply that. These dockland areas are unique only in the scale of the problems they face. Other areas are also in desperate need of economic revival, which can only be achieved by bringing hack the entrepreneurs, the private initiative, the private investment needed to create jobs, not just in traditional but declining industries, but in new, more vital sectors of the economy.

That brings me to the proposals for enterprise zones: an experimental package of measures designed to encourage enterprise and investment; a package which we believe will strike at the root cause of economic decline rather than, as so often in the past, just treating the symptoms.

The package consists of two parts: the removal of fiscal burdens, and the removal or relaxation of controls. Part XVIII of the Bill provides for a simplified planning régime, under which development proposals which come within the terms of the scheme can go ahead, without the need for an individual planning application. At the same time, all commercial and industrial premises will be exempt from rates for the life of the zone, which will normally be 10 years. The local authorities will be fully compensated for lost revenue by specific Exchequer Grant.

In addition to the measures in this Bill, the Finance Bill provides for exemption from development land tax, and for enhanced capital allowances on investment in commercial and industrial buildings. In addition, firms in enterprise zones will be exempt from industrial development certificate control, and from the requirements of industrial training boards; the Government will reduce their demands for statistical information to a bare minimum; and special arrangements will be made for the speedy and flexible operation of other controls.

My Lords, this is an imaginative proposal to revive the economies of rundown areas by creating a climate in which enterprise can flourish. Enterprise zones have been widely welcomed by the local authorities concerned and by the private sector. I am glad to say that almost 30 authorities put forward proposals for enterprise zones in their areas.

So, my Lords, there it is. I fear that I may have taxed your Lordships' patience in describing, in some detail, the provisions of a long and important Bill. It is perhaps a pity that the controversy surrounding the financial provisions have tended to obscure the fact that much of it has been generally welcomed. The Bill has been the subject of a good deal of comment in the press, much of it, as I have indicated, misleading, and it has of course been subject to lengthy debate in another place. Where comment has revealed room for improvement, we have made improvement. No doubt we shall do so again, at later stages in this House.

My Lords, this Bill is a practical response to a particular set of problems. It restores equity as between one authority and another; it enables central Government to ensure that their national objectives are being met. Far from eroding, in my view it enhances local autonomy and, in a word, it brings the relationship between central and local government up to date. Neither central nor local government can exist without the other. Each has its role. Each needs to be sure what are those roles. This Bill clarifies just that. My Lords, I regard it as a major advance for all, not least for local government. I beg to move.

Moved, that the Bill be now read 2ª—(Lord Bellwin.)

3.20 p.m.

Baroness STEDMAN

My Lords, in thanking the noble Lord for presenting this Bill to the House, may I say that many of us on all sides of the House, in spite of what he said, will sympathise with him in having to do this job. The noble Lord has a very long record of local authority service and the major parts of this Bill ought to cause him as much concern as they do the rest of noble Lords who have been involved in local authority work. We also look forward to hearing the noble Lord, Lord Grimston of Westbury, in the course of this debate. He had such a long association with the Association of Urban District Councils and will I am sure have something extremely useful to say to your Lordships.

This is not a single Bill but is the equivalent of five or six Bills in one masquerading under a Long Title which talks at the same time about extending—and about reducing—the controls over local authorities. It is a worrying Bill because, for the most part, it is an enabling measure which is far too much dependent on secondary legislation giving the Secretary of State the powers that he wants.

The Long Title says that it is a Bill to relax controls on local authorities. I welcome proposals for relaxation that are being made; but we shall need to consider whether either enough are being made or whether the right relaxations have been proposed. The Bill contains provisions for the publication of infor- mation by local authorities; it deals with valuation issues; it amends the law on town and country planning; it repeals the Community Land Act; and it contains provisions for direct labour organisations. But at the very heart of this Bill are a set of proposals which could fundamentally restructure the relationship between central and local government.

The Government's stated policy is to give local authorities greater freedom from central control and to rely instead on accountability. These two commitments should go hand in hand. Local authority freedom is only justified if there is effective local accountability. Equally, effective local accountability can only be really meaningful if there are very clear areas of local responsibility in which a local authority is free to act.

This Bill represents a fundamental change in the relationship between central Government and local authorities. Until now central Government have been concerned with the aggregate total of local authority expenditure. They have not been concerned with the expenditure of individual local authorities. Within that aggregate total from central Government's viewpoint there have always been some underspenders and some over-spenders and generally I believe that they have cancelled each other out. Throughout all this time central Government have not been concerned with the individual authorities, only with the aggregate level of local authority expenditure.

Now we are to have a change of principle because central Government are now concerning themselves with the expenditure of individual local authorities and not so much with the aggregate level of spending. Central Government are going to state a figure of expenditure for each local authority, and they are taking powers to adjust the grant in relation to the difference between what is the central Government's stated expenditure figure for that authority and the authority's actual expenditure.

Noble Lords opposite will no doubt argue that a figure was always explicit in RSG settlements, but there is a world of difference in political processes between figures that are explicit and figures in this case that are not explicit. It is the concern and involvement with particular local authorities that is the critical change and principle outlined in this Bill.

It has seemed over the past months that perhaps the Government have begun to recognise the dangers from their own understanding of what they are proposing. They will be identifying not only the over-spenders but also the underspenders; and for central Government to identify certain authorities as underspenders will put those authoritities under pressure to increase their expenditure. It is a dangerous power to give to any Secretary of State, and once written into legislation could be used by future Secretaries of State of another party to ensure that the underspenders increased their expenditure on what he or she considered to be vital services to be provided for the community. No Secretary of State, of whatever party, should be given these wide powers and these penal sanctions.

To the onlooker it now seems the Government are playing down the expenditure figure for each authority and are abandoning the phrase, "standard expenditure". They are now saying that they will give no publicity to the figure. Under the Government's proposals such a figure is necessary for the grant calculation and that figure makes a completely new public involvement in what is happening in each and every local authority.

In his address to the local authority chief executives last July, the Secretary of State said: I believe an effectively functioning local authority can monitor the activities of local councils far better than civil servants in Marsham Street". Yet this Bill at many points gives very wide powers to the Secretary of State with no limitations on or criteria about how he will use them. From the Secretary of State's statement one might have detected a belief in responsible local government. He seemed to see the critical choice between local accountability within a national framework and central control—which inevitably means control by civil servants. Yet in the Bill, at every critical point, the Government have chosen central control and influence rather than local accountability.

Let us look at the block grant. There is no indication of how national grant expenditure will be set. There is no indication of how the schedule of standard rate poundage will be drawn up. There is no indication on what principle the "multipliers" will be set. All this is for the Secretary of State to determine. In another place, during the passage of the Bill, the Secretary of State and his colleagues indicated their intentions; but those intentions are not in the Bill and are not binding on his successors in his own or any other party. Satisfactory relations between central Government and local authorities demand a degree of certainty and stability. Local authorities need to know the framework within which they operate, and they need to be free of arbitrary change. These arbitrary powers given to the Secretary of State are not merely about the block grant. We believe there are many other points which, in our opinion, are more than Parliament ought to be asked to concede without a much clearer criteria of how those powers will be used. I believe it is one of the duties of this House to check arbitrary powers being given to any Secretary of State, and we shall come back to this point again in Committee.

I hope the noble Lord, Lord Bellwin, will be able to give us more satisfaction about calculations surrounding the proposed grant than his Secretary of State did in another place. After all, the noble Lord will know of the grass roots feeling of local government and will know from his own personal experience how worried local authorities will be if they cannot work out the size of their grants or understand the component parts of its make-up. The block grant mechanism of grant-aided poundages, multiples, thresholds and tapers are quite incomprehensible and are capable of infinite permutations to give widely differing results.

The Secretary of State, in effect, asks for powers to approve a scheme of his choice; but he has indicated that if any other body produces a scheme which meets his unknown criteria and rules, and conforms to his ideas, then he would think about introducing that scheme. If that is so, then why did he not test the RSG alternative put forward by the local authorities? Could it be that no legitimate formula can be worked out to catch the Secretary of State's profligate councils which does not also catch many other councils? If he goes for the highest rate, he gets one answer. If he goes for the largest rate increase, he gets a different answer; and if he goes for a percentage increase he gets yet another answer. The truth, I suspect, is that a satisfactory formula cannot be worked out because local authority needs and resources are all very different.

This is the only occasion that I can recall, in almost 30 years in local government, when the local authority associations have not only all been agreed but have all been in opposition to the Government of the day. For the very first time ever a Secretary of State will be laying down what he believes should be the standard expenditure for every local authority. It will be the Secretary of State's judgment of what that standard rate should be. How will he work out an objective assessment of need?—because no two authorities are alike or have the same needs or the same resources. Almost six years ago I made my maiden speech in this House on the subject of local government finance. Local authorities possess the powers they have because of the powers and duties that have been laid on them by successive Governments. I accept that, from time to time, those powers which Government give, Government can also take away. But in my maiden speech some six years ago I said there were three things we ought to be asking the Government to do. First, Government should tell local authorities what is to be the level of local government services; secondly, they should tell them what is to be the level of Government grant towards those services; and, thirdly and perhaps most important, they should tell local authorities how that grant is to be distributed.

I also referred, as did the noble Lord, to the local authority dislike of the multiple regression system used to calculate RSG. This is totally unacceptable because the figures on which it is based are completely out of date before they are used. I went on to urge the Government to have more regard for areas which had a lower than average income and which included new and expanding towns, so that the factor of high expansion might also be taken into account when deciding the RSG. I asked that more help should be given to local government so that they could provide the services which central Government statutorily placed upon them. I also asked that changes in RSG should be taken at a slower pace and that there should not be massive swings in any one year.

My fears are the same today as they were six years ago. If the powers are suddenly subject to an arbitrary shift and arbitrary change, if the balance swings so dramatically away from the county halls and the town halls, if they lose their rights and Marsham Street steadily increases its control, then the whole fibre of local democracy is at stake. I am sure that those people sitting on the sixteenth, seventeenth and eighteenth floors of Marsham Street looking out over London and beyond are very worthy people, but they do not know what is best for, or what is needed most by, this urban conurbation or that rural community. Local government should—and must—be local, and this Bill reduces local government to a group of agency services directed and overseen by faceless persons in Marsham Street.

Like other noble Lords and Members of another place, I have been lobbied by my local council—in this case Cambridgeshire County Council—which is Conservative controlled. They told me that, although they supported the Government's overall economic objectives, they felt very strongly that responsiblities should be shouldered locally, and the consequences taken locally, including the financial ones. They opposed the capital expenditure controls because equitable central allocation of spending needs is impossible, and because Government recognition of emerging social or economic problems will be much slower than that of an independent local authority. They felt that unless expenditure-related systems for assessing local needs, such as regression analysis, were abandoned, the system for the block grant would remain unstable and would lead to annual grant fluctuations which would frustrate any sensible planning and that the transitional arrangements for 1980–81 could result in a prudent local authority at county council level losing its grant if the spending of any of its districts were too high.

Cambridgeshire asked, among other things, for a proper definition of central and local government responsibilities; for a developing role for the local authority associations; for an increase in the accountability of local authorities and an early revision of the system for determining rateable value. They felt that this Bill took away local discretion, that it produced an administratively cumbersome RSG block grant machinery. They told me that it would be complex, that it would be costly, that undoubtedly it would be undemocratic and that it would lead to a loss of local democracy and an inability to determine local needs locally. I believe that the views of Cambridgeshire are basically shared by all the local authority associations, to a greater or lesser degree.

Cambridgeshire were also concerned about the proposal to introduce charges for planning applications. In that respect there was a letter in yesterday's Times from the chairman of the planning committee of Birmingham. He explained that in Birmingham they would probably get about £650,000 in fees for planning over a full year. It will take about a quarter of that to collect it. The Government will probably and promptly dock the full amount from the rate support grant, so that this city will be £160,000 worse off than it was before it started. That is the sort of effect payment for planning charges is likely to have on the local authorities.

On the DLOs, the Bill lays down how the accounts should be prepared so that councillors, officers and the public can understand better the position of the DLOs. These powers will all strengthen local accountability, and I do not object to rules being laid down for DLOs to be run as commercial undertakings. But the Secretary of State is to have power to instruct local authorities whose rate of return on capital falls below a level specified by him to discontinue all or part of their DLO operations. Local accountability is not to be relied upon. Central control must take its place. Regular revaluations are also essential if the rate base is to be kept up to date with current circumstances and if it is not to involve substantial injustices arising between individual ratepayers and between classes of ratepayers as to the relative rate burdens which they bear. Without these regular revaluations, the whole rating system is liable to be undermined. Decisions have to be made on which classes of property shall be revalued under the Government's scheme for partial revaluation and which shall not. Arbitrary adjustments will have to be made to the basis of taxation of the un-revalued classes if the balance of rate burdens between all classes is not to be seriously upset. Controversy will follow any of the partial revaluations, and controversy of this kind should not attend the rating system, because, if it does, it will serve only to undermine it as a whole.

The clauses about the UDCs are worrying, in that the question of hybridity seems to raise its head. While the Secretary of State avers that the UDCs are for London and Liverpool only, this Bill does not say that. It gives the Secretary of State general powers, with no provision for a public inquiry if other areas are included in due course. This is something we would like to inquire into and examine further before the Committee stage. On the disposal of public land, this Bill again assumes that the Secretary of State is better able to judge than the local authority whether the local authority requires that land or not, and, again, it is central control replacing local accountability. Local government is about the government of difference. Different authorities come to different conclusions and make different decisions about their expenditure needs. The justification for all this is their local accountability.

The Layfield Report said on page 299: There is a value in different decisions being taken in different places, by people of divers experience, associations, background and political persuasion". I ask the Government to accept that there is a value in a diversity of approaches, in the diffusion of powers, and even in some local authorities overspending and others underspending. Local authorities should be able to make their own judgments about their expenditure needs—capital or revenue—provided they are prepared to finance them from their own sources and make their own decisions with a due sense of responsibility and local accountability. There is no real evidence that, overall, local authorities have badly overspent. What is needed is a bipartisan approach to local government finance to make it simpler and to be realistic about the needs it is to cover. I can see no reason why the Government should not consult with the local authority associations to agree a minimum level of specific services and, if necessary, pay specific grants towards those services, leaving local government with fairly wide discretionary powers to meet their other needs and raise their own money through rates, and be accountable to their own electors for their decisions. After all, who can define standard expenditure? Local authorities should be able to decide if they want to levy a higher rate to give a better service or to allocate resources for new town growth and other things.

We shall also want to consider further the clause relating to new towns concerning the sale of assets and payments to the Secretary of State. The capital needs of the third generation new towns are still very substantial and the Government should be considering whether it would not be sound investment policy to use the money to complete them quickly. Money from new town assets should be used for new towns and other associated projects and not go into general funds, whatever they may be used for, whether other services or tax handouts.

This is a monstrous Bill; it really is. It is constitutionally deficient in that it is retrospective legislation. In April of this year local councils levied their rate, as they were legally entitled to do. In November or December, if this Bill gets on the statute book, and if their rate is higher than the 119p threshold laid down by the Secretary of State, then they are liable to have broken the law retrospectively. We in this House take a very dim view of any form of retrospective legislation.

The Bill is arbitrary in that the Secretary of State will decide who are the offenders. It is capricious in that there are no consistent rules of the game, and such rules as there are can be altered at the whim of the Secretary of State to catch different authorities at different times. It is a covert and dangerous Bill in that local authorities will not know what crime they are to be charged with; they will not know the circumstances in which they are committing the crime and they will not know what will be their punishment. It will be a sad, sad day for democratic local government if this ill-conceived Bill gets on to the statute book. We will do our best to amend it and make it more sensible, but the best thing the Government could do is to withdraw it altogether or at least delay implementation of the local government parts while the whole question of local government finance and levels of services can be calmly considered and a workable measure introduced to replace this iniquitous piece of legislation.

3.43 p.m.

Lord BEAUMONT of WHITLEY

My Lords, I should like to thank the noble Lord, Lord Bellwin, for explaining this Bill in his speech. He is a very brave man to have not even yet fully emerged from the Housing Bill and to be embarking on this one. My noble friend Lord Evans of Claughton is made of less stern stuff. He has departed on engagements previously entered into and I am taking his place rather humbly this afternoon, although he will be taking charge of the efforts from these Benches during the Committee stage. We welcome the debate that is to be held this afternoon and we look forward particularly to the maiden speech of the noble Lord, Lord Grimston of Westbury, and expect that his experience in this field will help us not only on this occasion, when he will, of course, be uncontroversial if indeed one can be uncontroversial on this Bill, which I doubt, but during the Committee and Report stages.

This Bill claims to be devolutionary. It is nothing of the sort. The bits of it which devolve powers are minor and cosmetic, but centralisation is the key, because the key does lie in these ill-starred financial clauses. Not only is centralisation achieved; the door is open for considerably more for, as the noble Baroness, Lady Stedman, has pointed out, the opportunities given to the Secretary of State for his discretion under the powers given him in this Bill are to a very large extent unparalleled, and I think we ought to do something about that in your Lordships' House.

The Liberal Party is a party which stands for devolution. We would like to see it happening in a large number of different ways. In particular, I think we should like to see some very real power devolved from Westminster and Whitehall through the introduction of regional government of a kind put forward in the recent paper by the Outer Circle Policy Unit but adopted by the Liberal Party quite a long time ago; but nothing so radical as that is to be expected from this Government. Nevertheless, it is not to be found surprising, I think, that we are opposed to a great deal of this Bill even I though we join with the Government Benches in paying service to devolution fundamental objections to the block and freedom.

In our doubts about this Bill we are far from alone. As the noble Baroness has pointed out, the unanimous opposition of local government bodies is the most striking condemnation of the Bill and its policies. I suppose the most interesting thing, or one of the more interesting things, about the recent Sessions in this House, is the way in which the Right-Wing attitudes of the Government have thrown the two Opposition parties, who after all have a very great deal to divide them, more and more into each other's arms, so that it is very difficult for me to disagree with much that the noble Baroness, Lady Stedman, said. That is not because we do not differ on a large number of matters in this field. It is merely because the Conservative attitude and the Government's proposals are so far one way. There are, of course, good features in this Bill. There is the disclosure of information, although that is rather selective in its impact, as between central and local government, but it is still important and we would like to see a great deal more of it.

The key part of this enormous Bill is still the block grant proposal. I think it is a great pity that the problem, whatever the Government decide the problem was, should have been tackled in this way. It seems to many of us that it just so happened that this particular kind of "reform", which will have the effect of transferring power from local government to central Government, happened to fit in with a period when the Government need to reduce local government expenditure, and that, in fact, the two have very little in common. There would have been much better ways of reducing expenditure without necessarily introducing these half-thought-out returns. The rate supply grant could have been reduced for a couple of years. There was no need at all for this institutionalised central control. Again we note unanimous opposition from local government bodies, including most of the Conservatives in local government.

In an extremely good article in the Financial Times today by Robin Paulcy—I hope noble Lords will read it, if they have not already read it, because it really sums up a lot that is wrong with this Bill—the author says that there are three fundamental objections to the block grant clauses. One is: They represent a hasty hid to legislate in principle on a very complex subject before any detail on the working of the scheme had been investigated. I think there is very little doubt that the Government really do not know where they are in the middle of this question. Secondly, the clauses of the Bill are full of open-ended proposals giving power to the Secretary of State of this Government and of future Governments. Thirdly, there was a pledge that these clauses should be introduced with full consultation; and in fact little consultation of a give-and-take nature has occurred.

People seem to differ as to whether there are five or six Bills here. I notice that the noble Baroness hedged her bets and said "five or six". It is far too much for Parliament to deal with sensibly at one sitting. The Long Title alone has 18 lines and it resembles one of Mr. Bernard Levin's sentences, but without any of his wit. Five separate Bills: it would weary your Lordships if I were to dwell on the details of the clauses of all of them, so you may be assured that I am not going to do it.

There are one or two points I wish to bring out now. The first concerns the proposal to charge for planning permission. That is retrograde and unsupportable. I would have thought that the Conservative Party would have been the first to undertake the presumption that, in a free country, it is for people to do what they want and, if they are being stopped for good reasons by the community, the community should pay for some of that expense. It is not for the individuals, who want to do what they can with their own, to pay for the privilege of asking whether they should be allowed to do it—and if that is not a Conservative, as well as a Liberal, principle, I do not know what is. So let us change that when we get to the Committee stage.

Secondly, there are the urban development corporations and we will look at those carefully when we get to them; but at the moment, as the noble Baroness, Lady Stedman, also said, the open door to the making of many more of these without consultation seems completely unacceptable. Again, surely the Govern- ment can find some way of putting some limit on that. At any rate, if they do not, we will try to do so.

This Bill is the product of an able and ambitious Minister but as a result it is an over-large, over-complex Bill, produced far too quickly, and undoubtedly it has got a very great deal wrong. At a press conference, according to the Guardian of 29th July, the Secretary of State said: This year we shall be pointing out the signposts where we want to go, improving the system later. Don't prejudge the system. Give us a few months and you will understand it better and see how it works". I suspect that if he had changed the pronoun and said, "Give us a few months and we will understand it better and see how it works", that would have been a lot closer to the truth.

Large parts of this Bill are opposed by something like 80 or 90 per cent. of people who know about local government at all, including such dangerous radicals as Sir Horace Cutler and Mr. Geoffrey Rippon! It is one of the biggest messes of any legislation that I have seen going through this House in the 12 years I have been here —it is certainly the biggest during that time, and I should have thought that other Members of your Lordships' House, with possibly a longer time than my own, would find it hard to find an equal. I hope your Lordships will radically reform it. Never has the work of a reviewing chamber been so necessary. It is intolerable that we should have to do it at the tail-end of a Session, and I want to say something to the Government Front Bench and particularly to the Government Whips. It will be a crying scandal if this Bill which, I think by common consent, is not yet completely formed and has immense problems, were subject to the kind of pressure we have had in the not-too-distant-past, of all-night sittings and trying to deal with complicated clauses at 2, 3 and 4 o'clock in the morning. If that were to be the case, I think your Lordships' House would be justified in going on strike. We have a job to do; let us do it in a dignified and effective way and do not let us be bullied by expediency into passing bad legislation—because that is what we will do if we pass this Bill unaltered.

3.55 p.m.

The Lord Bishop of WINCHESTER

My Lords, far be it from a prelate to impugn the good faith of any Government or of those who, in their name, draft and redraft such a Bill as this; but there is a degree of double-talk concealed in this Bill which must be brought to light and clarified at this all-important stage. In short, the Bill claims to relax controls over local government and to encourage initiative at county level, while what it actually ensures is the tightening of control from Marsham Street at point after point. Either this is totally uncharacteristic of the present Government's philosophy or we have been gravely misled.

Your Lordships may forgive me for starting with principle. I am not prone to fly a party flag, but I am profoundly and unceasingly disturbed by the spreading blight of irresponsiblity in our national life. T have to ask myself what it is that breeds the spirit of indifference, apathy, mistrust, frustration and violence which sour our relationships and sap our enthusiasms. I am as sure as human half-truths can be that the source of our malaise is to be found in the seeming powerlessness and lack of participation of the people on the spot in one sphere of our life after another, and not least in the Church. There is a widespread feeling that all the decisions that determine men's welfare and the future of their children are being taken by other people a long way off and anonymously; so that we are not responsible and we will not behave responsibly.

There is only one way of combating irresponsibility, and that is to make more people responsible. I have not said, "to make more people wise", for that is something no one can do. I have not said, "to make more people competent", for even that may be asking too much. But you can, if you dare, make a stupid person responsible for his follies and you can make a learner responsible for a job. They are more likely to learn the tricks of the trade, and even a little wisdom, if you take the risk of trusting them than in any other way. Give as many citizens as possible the power to share in decision-making that concerns their immediate neighbourhood and, having put power into their hands, stop breathing down their necks. Let them learn from their mistakes, and society will begin to regain its health. Of course there will be folly, and some- times downright graft. I read my North Riding nearly 50 years ago and I have smelt corruption for myself, but better the devil you know than the devil you do not. There is nothing in centralisation to guarantee purity of the hands or wisdom of the head. If things go awry and if money goes astray, it is healthier that the culprits should be known by their christian names and chopped by a local tribunal. So much for principle, and now conies this extraordinary Bill—extraordinary on account of the stable from which it has emerged.

My choice of political colour has always been dictated by compassion and almost nothing else. My dilemma has consistently been that those who give priority to the needs of the weak and the disadvantaged diminish the very people they want to help, by assuming that they themselves know best what is good for them. Highly centralised paternalism grows arrogant and blind, as night follows day. That has been my quarrel—and, usually, my only quarrel—with the Labour Party. The merit of the Tory Party, in my eyes—I would almost say its saving grace—is that it has appeared to value the individual's responsibility and the local initiative. That is the philosophy that this Bill seems to give with one hand, but takes away with the other. It purports to reflect the White Paper Central Government Controls over Local Authorities, but in the outcome it seeks to write into the statute book a loss of nerve and a change of tune. This is what needs to be changed at this stage.

If I may briefly refer to a few of the Parts of the Bill, I think that no reasonable person can question the principle of answerability in Part II, but that is already recognised. City councils publish an immense quantity of data and will continue to do so. Private companies are also accountable, and there is a great deal of law to insist that they be so, but they are required to give only a half-yearly account of their affairs. To be asked to do so quarterly is plain stupid. The demand goes too far and asks for too frequent reporting. The code of practice, which is not just a line of guidance but is statutory, will actually cost the Hampshire County Council £20,000 extra each time to comply with the demand for collecting, printing and posting information.

But in Part III we see clear direction against the unchallenged prerogatives of the massive service departments of some of the larger councils, some of them 1,000 strong. We have known that the Government are determined to expose these entrenched rights to competition, but the weapon they have chosen is too blunt. It destroys, quite unnecessarily and absurdly, the efficient quickness to respond of local councils in smaller matters. For the big jobs, the city councils already test the market, but it is unreasonable to require that small fiddling jobs or routine seasonal jobs—winter work, snow work and so on—be put out to tender before you can send off your snow ploughs and get the job done.

Part IV, however, is the most glaring example of central interference and is totally opposed by every council whose opinion I have sounded. The Minister claims that its proposals are simple, but in fact they impose a very complex grant system in which the scope for undisclosed manipulation from the centre is enormous. The noble Baroness, Lady Stedman, has already shown most forcefully the entirely arbitrary powers which the terms of these clauses will give to the Secretary of State, and to any future Secretary of State, to jig and re-jig the multipliers.

Such powers are bound to erode local democracy and local participation, and responsibility will be at a premium. Local departments dealing, for example, with rural transport or inner city rehabilitation will never know until the last moment how the powers of revision will be exercised at the centre in respect of what they want to do. It is fine for the planners of Marsham Street. It is hopeless for the planners in Winchester or Southampton.

But I give more concern to the question of supplementary expenditure, for it is here that initiative can still be used. At present, there is this very treasured degree of flexibility and manoeuvre retained by local councils, who may realise their own assets of land or property either to borrow or to raise capital to implement plans and suggestions for development which would not achieve central approval. But the Bill would require the Secretary of State's authority for every borrowing and the inclusion of locally raised capital in the authorised budget.

Only recently, I was visiting one of the areas on the boundaries of Southampton —a desperately deprived area of soulless housing estates—which, until fairly recently, has totally lacked a human heart. One of the things that have produced that heart and introduced a sense of community is the building of the Lords Hill senior school, which not only provides education and a meeting-place for the parents of that area, but also offers important community provisions. It has been one of the really saving features in that otherwise desperate situation. It would not have been approved from the department, as part of the capital programme, but was financed entirely by local effort. The Southampton City Council put in £500,000 and the county council raised the rest. That is the kind of initiative which, surely, our present Government are supposed to encourage.

What are we doing, seeing the removal of those very powers from local responsibility? I could speak in detail of minor road schemes that have made an enormous difference to people in rural areas, and other school improvements—all of them done from this sideline budget which still gives maneouvrability and flexibility. So I would plead for this limited freedom for authorities to supplement the annual capital allocations.

At an ill-considered moment in 1950, in a party political broadcast, Sir Winston Churchill said: Perhaps it is better to be irresponsible and right, than to be responsible and wrong". I could not disagree more. I believe it is fundamental and profoundly true that it is better to have a responsible citizenry and often be wrong, than to be right and make the people irresponsible.

4.8 p.m.

Lord GRIMSTON of WESTBURY

My Lords, this is the first time that I have ventured to address your Lordships' House. Your Lordships will appreciate that, for someone who has spent most of his life with the whiff of politics around him, it is not an easy task to remain entirely non-controversial as I must do in a maiden speech. I would not want to contribute to a custom occasionally more honoured in the breach than in the observance. I shall do my best to conform, especially having been brought up to acquire very great respect for parliamentary usages, customs and traditions. If I should err in some slight degree, I hope your Lordships will be indulgent, bearing in mind the Latin tag de minimis non cureat lex which translated tells me that the law is prepared sometimes to overlook minor offences.

Before I move on to the main part of my speech, perhaps I should just refer to the remarks of the noble Baroness, Lady Stedman, and the noble Lord, Lord Beaumont, about my association with the urban district councils. Actually, it was my father, so I feel that I should avoid that subject in case there was controversy during his tenure as president.

I notice that in Clause 117 of the Bill before us the object of an urban development corporation should be to secure the regeneration of its area by various means, including the creation of an attractive environment. However, I feel that insufficient emphasis has been given in the Bill to this particular point, so I have alighted on the important matter of pollution in the form of litter, which is so detrimental to our society.

Only the other day I read about a correspondent of the Economist who returned to London after a tour overseas and remarked on the incredible filth and litter which he saw in London. It is not just London. The problem of litter is a national one, affecting urban and rural areas alike, and is a national disgrace which detracts from the creation of an attractive environment. Provisions for the disposal of waste products of our modern society constitute a real and urgent problem.

Equally important, we need a change in the social habits of a very large section of our population. To some extent the attitude of our adults and adolescents may even be regarded as a criticism of our educational system. Perhaps children have already gained the impression that pollution should form part of the natural environment. We have so far failed to convince people that litter and pollution are unsightly, offensive, quite unnecessary and entirely unacceptable. It is surprising that the public do not regard the desecration of our cities and the countryside as a major anti-social crime. The strewing of litter is usually thoughtless and inconsiderate, whereas the practice of dumping rubbish is deliberate.

This attitude is not confined to any section of the population—for instance, those whose housing conditions do not encourage habits of cleanliness. No doubt there are practical difficulties in determining what is accidental or otherwise. It occurs to me that if I was on a public right of way and my handkerchief was blown on to private land, technically I could find myself in difficulty with the law of trespass in trying to retrieve it. Likewise, technically an offence is being committed by the universal custom of throwing confetti over the bride. Maybe clearance should be added to the best man's duties.

Although I am not aware of the number of fines imposed for offences under the Civic Amenities Act, or other Acts, apparently the deterrent effect is negligible, judging by the various forms of rubbish which we all see around us. The scale of the national problem is illustrated by the fact that each household in Britain produces an average of 10 lbs. of waste paper and other wrappings each week, and that is before starting on the heavy stuff, such as cars, refrigerators and old television sets.

Having spent some time in outlining the extent of the problem, I feel that your Lordships may expect at least to hear of one or two practical suggestions to mitigate what I hope many will feel is rapidly becoming an environmental disaster. Perhaps it is a pity that sweets were ever de-rationed. Sweet papers and the ever-growing insistence upon cleanliness over the wrappings of food have produced an ever increasing amount of paper. The age of the motor car has brought with it one of the major causes of pollution in its many forms—not least the dispersal of old, disused cars themselves. Turning to personal refuse, why should not all car manufacturers he asked to help by incorporating a litter bin in their new models; and why should not importers also be asked to do the same? Perhaps the same criteria could apply to all forms of commercial vehicles, with larger bins being installed in public transport.

Another suggestion which I commend to your Lordships concerns the obligations of outdoor caterers to provide adequate or, indeed, any facilities at all for disposable rubbish. Recently I appeased my appetite and quenched my thirst in a caterer's tent at a national event, and on each occasion I had to ask for a receptacle for the wrappings. The only thing that could be provided was a small polythene sack designed for a pedal bin. The total inadequacy of the caterer's arrangements could be gauged from the sea of disposable litter which lay around the tents at the end of the day and which was blown around by the high wind.

Yet the question goes far deeper than this. The country needs a new attitude to the production of consumer packages which are not easily disposed of. The plastic bottle, whether for milk, wine, medicine or the like, to name a few examples, although potentially cheaper, is in this sense a regressive step from its glass alternatives. There is much to be said for subtantial refunds for returnable containers to make it worthwhile to take the trouble to collect them. Nor should it he beyond the wit of the Treasury to devise a tax or other disincentive to the manufacture of endless amounts of tins, cartons, et cetera.

An idea of Machiavellian brilliance which I have read about is to replace the "best kept village" competition with the "ugliest eyesore" contest, with a booby prize to shame untidy villages into the decency that could never he instilled by the fining of individuals. I would hope to see this "ugliest eyesore" contest becoming a continuous and nationwide rivalry of reluctant and gradually diminishing filth. Someone is making a fortune, and someone—those who have to pay for all this useless stuff—is losing a fortune. Surely it is time for a few changes. The Keep Britain Tidy group is but scratching the surface of the squalor which we see before our eyes.

Let me end with the more cheering news, according to the British Trust for Conservation, that at least 60,000 people in Britain are willing to spend some of their spare time in labouring to clean up the country. It is surely better for those ready for work but unable to find any not to moulder in idleness but to find something constructive to do.

4.20 p.m.

Lord GREENWOOD of ROSSENDALE

My Lords, for two reasons this is for me a unique occasion. First, I am speaking on a Bill which disturbs me more seriously than any Bill that I can remember reading in 35 years. The second reason is that during that time it has never been my good fortune to have to follow a maiden speaker and to congratulate him. That I do, therefore, not only with sincerity but also enthusiasm because for me, like him, it is a new experience. It was a memorable and thoughtful speech which we all appreciated very much. After all, the noble Lord comes from a good stable and when he speaks, as we hope he will frequently speak in your Lordships' House, we shall have a twofold pleasure: that of listening to his words and his arguments and that of remembering his father as well. Perhaps I could particularly emphasise that because I succeeded the noble Lord's father as president of the Urban District Councils Association.

I speak today as president of the Association of Metropolitan Authorities, which cares for nearly 20 million of the people of this country. In the course of my remarks, in which I am speaking not for my party but for the association, I shall try to be restrained in what I say. If I fail, it will simply be because of the importance that I attach to the wellbeing of local government.

This is a bad Bill. It is not surprising that it won very little vocal support in another place. Outside, it provoked Sir Godfrey Taylor into comments as pungent as those of Councillor Jack Smart, and, as my noble friend Lady Stedman said, it has created a remarkable unity between the associations which old local government men like myself would never have dreamed possible. We hope that it will become more and more usual for the noble Viscount, Lord Ridley, and the noble Lord, Lord Sandford, to speak with one voice. We have our own trade union—the National Union of Presidents of Local Authority Associations: they are the two junior members of it, having come most recently; it is flourishing and, in the light of what the noble Lord, Lord Beaumont of Whitley, said today, I am going to suggest to the noble Lord that we might perhaps make him the shop steward.

Today I shall confine myself to only one aspect of the Bill and that is the aspect which constitutes, in Mr. Rippon's words, "a threat to local democracy". The noble Lord, Lord Bellwin, for whom my affection and admiration are great indeed, cannot just brush aside this widespread expression of view, especially the view of such experienced members of his Party. Let us not pretend that this Bill is one to relax controls over local government. It is an incredible description when clause after clause gives the Secretary of State for the Environment greater powers over local government activities. Most seriously, this Bill is about money, about the resources of local government, and about the way local government may use those resources. That is what makes many of us so anxious about the possible implications that the Bill might have.

The changing control over local government expenditure, embodied in the block grant proposals, is a radical departure from past practice, when government influence was much less exact, but I believe that that influence was very effective indeed. I believe that despite that lack of direct control the use of the grant weapon and cash limits, plus circulars and other channels of influence from central to local government, have ensured that local government expenditure over the years has kept within the guidelines set by central Government. If the noble Lord, Lord Duncan-Sandys, and the noble Lord, Lord Hill of Luton, disagree with what I am saying in the light of experience, I shall look forward to hearing them and perhaps at another stage joining in discussion.

I find it hard to see why the Government are so insistent on the block grant. The essence of the block grant is that the Government would end by prescribing expenditure limits for each and every local authority, with serious penalties on the local ratepayers if the prescribed limits were exceeded by amounts yet to be determined. My noble friend Lady Stedman was so right in her comments on that. As the Bill is drafted at present it represents a serious threat to local autonomy and the future of local democracy. It empowers the Secretary of State to make decisions on local government grants in such a way that individual authorities could be penalised by the Government, even though they, the local authority, were acting properly within the law. This cannot be right.

I do not for one moment impugn the integrity or the intentions of the Secretary of State, but I do beg him to realise that he is creating an opening for less scrupulous successors and that is something which fills me with alarm. The associations, united by their concern, put forward a proposal to modify the operation of the existing rate support grant system. Like them, I do not think that the rate support grant system is ideal. I agree with the Minister that it is desirable that some changes should be made, but I am sure it is wrong to replace it in the way that the Ministry is suggesting, or indeed at the time.

When the associations put forward their proposal to modify it, that proposal was rejected. Again in May, in response to a request by the Minister of State for the Environment for constructive amendments to the proposed block grant system, the associations jointly put forward a list of proposals which would have dealt with the most serious problems associated with the block grant; but only minor changes were made by the Government at the Report stage in another place. That is a tragedy, because the new proposed block grant system is even more complicated and difficult to understand than the rate support grant.

Furthermore, the block grant system will introduce crippling uncertainties into local government finance. I say that because final allocations of the grant can only be made when the accounts for the financial year in question are balanced and audited. I ask your Lordships to think of the uncertainty and instability that will result from such a system. Indeed, concerned by the complexity and the apparent anomalies present in these proposals, the chairman of the AMA, supported by the other associations, asked the Government whether the implementation of the block grant could be postponed for one year. I understand that this request has been turned down and I think it would be most appropriate if your Lordships were to urge Her Majesty's Government to be less headstrong in this respect. As the forerunner to block grant next year, 1981–82, the Government are seeking to introduce this year transitional arrange- ments whereby so-called high spending authorities will be penalised by having their rate support grant reduced.

I will not go in detail into the rationale behind the Government's proposal; I will simply deal with the results it will have, and I once again agree very much with the noble Baroness, Lady Stedman, on this point. A survey which the AMA conducted, using figures produced by the Department of the Environment, really does suggest the most extraordinary quirks. Newcastle's planned spending for 1980–81, compared with its assessed need, produced for rate support grant needs element distribution purposes, shows that it "over-spends" by 24 per cent. Newcastle's uniform rate for 1980–81 is 50 per cent. above the Secretary of State's notional uniform rate of 119p. But Newcastle's repriced and adjusted outturn for 1978–79, compared with its planned spending for 1980–81, shows that the "overspending" has now miraculously become only 5.8 per cent.

I ask your Lordships to look at another authority, Leeds, partly because it is where I was born, and partly because it is a city where the noble Lord, Lord Bellwin, and the noble Lord, Lord Marshall of Leeds—whose presence in the House I welcome very much—have both been leaders of the city council. The planned spending of Leeds for 1980–81, compared with its assessed need produced for RSG needs element distribution purposes, shows that it "underspends" by 7.5 per cent. The Leeds uniform rate for 1980–1 is 15 per cent. below the notional uniform rate of 119p. But, amazingly, the city's repriced and adjusted outturn for 1978–9, compared with its planned spending for 1980–81, shows that it is now "overspending" by 6.5 per cent. On the same basis of calculation, "overspending" by Camden of 117'5 per cent shrinks suddenly to 2.2 per cent., while Croydon, previously "under-spending" by 8.7 per cent., suddenly "overspends" by 5 per cent. Your Lordships may well think that the implications of this extraordinary survey are terrifying. How, indeed, can we allow penalties to be imposed on a basis as precarious as that?

Let me move on quite briefly to the other area of concern. The Government are proposing a very tight control over the total capital expenditure of each authority. And the apparent concessions to freedom, the abandonment of control of individual projects, and the putting of all the authorisations into five main blocks of expenditure, with apparent freedom to move from one block to another, are no compensation. They are no compensation because the chances of that form of freedom working are very small. To take an extreme example, one has only to think of the possibility that an individual local authority would not spend money at all on, say, housing, and would spend it all, perhaps, on school buildings, to see what would happen.

By definition Ministers are responsible for the services with which their departments are concerned. No housing Minister could stand by and see local authorities choose not to spend on housing capital money which he had provisionally allocated for the services for which he is responsible, and it really is a nonsense to suggest otherwise. That Minister's credibility would not survive a week. The apparent freedom to exchange between one block of expenditure and another is wholly illusory, or would be so in practice.

I do not believe that there is any justification for a change from a system of borrowing control to one of expenditure control. An expenditure control system based on single year allocations will make medium-term financial planning by local authorities far more difficult than it is at present, will probably result in the under-use of resources, and will almost inevitably produce a lack of certainty.

I hope I do not appear too negative on this theme. There are, I think I should say, areas of the Bill I welcome, and I know that all of us will want to express our appreciation of those at the proper time. But I must emphasise again the anxiety and the sadness that so many of us feel at the overall damaging effects we believe to be inevitable if the Government insist on pushing this Bill through the House, a Bill which is so alien to our traditions.

Perhaps your Lordships will allow me to give the last word to the Local Government Chronicle, a most responsible periodical, which in the current number has a leading article "Flow not to simplify local government finance". It ends up: The block grant as envisaged will not simplify local government finance. The reverse will be true. The suspicion remains that its introduction is for another reason, to inhibit local authority autonomy. That is an alarming thought which should be shared by many Peers when the Local Government Bill moves into the Lords.

4.37 p.m.

Viscount RIDLEY

My Lords, I should like to add my congratulations to the noble Lord, Lord Grimston of Westbury, on his maiden speech. I am sure we were all delighted to hear his views on litter. Living as I do myself on an urban fringe, I know exactly what he is talking about, and I shall be very careful to see that the unnecessary bumph which we have with us in the Chamber is not left lying about tonight. This is a massive piece of legislation to put before your Lordships in the month of August, particularly coming from a Government who in Opposition promised us much less legislation than we have ever had before.

I think we all admire the great skill with which my noble friend Lord Bellwin has piloted legislation in this long and difficult Session. We look forward very much to debating with him on this subject. We congratulate him on the way he has introduced this Bill today. I hope I can promise him, as others seek to do, a bit of trouble on some of the provisions of the Bill before it is finished. I believe he is going to have the support or otherwise of his noble friend Lord Marshall of Leeds, and I am delighted that we have the noble Lord with us today. It seems to me that Leeds may be somewhat over-represented on these Benches at the moment. There is no harm in that perhaps, just as in 1972, the last time we debated local government in August, we had much over-representation from counties like Hampshire.

Your Lordships will be glad to hear that I do not intend to deal with the whole of this Bill today. There is much to welcome in it. I am particularly delighted at Part I in which the Government intend to relax controls. It does not go very far, but where it does go is in the right direction: and we hope this is just the beginning of a considerable move in that direction. With regard to Part II, publication of information, nobody could object to the theory behind this. I hope we can be careful that the information required is not too detailed because that will become over-expensive and costly for local authorities, but the principle must be right, as indeed is Part III where direct labour is long overdue for the attention which it will get. I particularly welcome Part XI. I hope we have fewer all-night sittings at the demise of the Community Land Act than we had during its birth.

I hope your Lordships will allow me to concentrate today on some of the aspects of the Bill which particularly concern the Association of County Councils, of which body I have the honour to be president and which interest I now declare. The most important of these are Parts VI and VIII dealing with local government finance. I can claim some special knowledge of that, not only from my own experience for 12 years as chairman of a county council—during which time we coped with four Governments; two Labour and two Conservative—but as a member of the Layfield Committee which produced a massive volume on the subject of 494 pages in 1976 which has never been debated at all in this House. It is a tremendously complicated and tedious subject. It has its own jargon of "clawbacks", "key sectors", "non-key sectors", "tapers", "multipliers", and terrible phrases have crept in like "negative increments", "zero growth" and even "regression analysis". Sometimes I think that one could say that only Britain could have invented such a system which is properly understood by only a tiny minority of experts and which remains, and will always remain, by its very nature imperfect at some point.

The new system proposed in the Bill of block grants is in response, as we have heard from my noble friend Lord Bellwin, to claims that the old system was unfair, capable of political manipulation and unjustly rewarded the spendthrift authorities and the extravagant at the expense of the others. One must ask whether the new one is likely to be any better. I do not think so. Local government and the associations which are representative of local government are united, as we have already heard, in not thinking so too.

I shall try to explain briefly why not. First, because the associations do not believe that the proposals will completely solve the defects in the present system—indeed, they may well create others just as serious. Secondly, and most import- antly—and this has been mentioned many times already today—the new proposals will noticeably increase the powers of central Government to influence local spending decisions. Indeed, the whole Bill is riddled with increased powers for the Secretary of State throughout its whole length. Thirdly, the new proposals will be just as complicated, if not more so, than the present system. Any hope that the block grant would be a simpler and more intelligible system and was being introduced for that reason has already I understand, been abandoned by the Government. Furthermore, this complexity means that it will be very difficult indeed for authorities to forecast accurately ahead and plan as they must do.

Parts VI and VIII of the Bill represent a fundamental and significant shift of power from local to central Government. In the main message which the Layfield Committee produced we said at that time that the country had to choose between what we called a "localist" system and a "centralist" system. It had to go either one way or the other and either way could be made to work. The Government opted for the centralist system. It will be very difficult for this trend to be reversed and I greatly regret that it is a Government which I so strongly supported which has chosen this course of action.

No one denies the right of Government to decide the overall totals of rate support grant. That has always been the case and will continue to be so. And, with a few minor exceptions local government has conformed very accurately indeed to the target figures which have been asked of it. Its performance over recent years is within 1.5 per cent. of the target. I submit that it is a far better record than any Government have yet achieved. Indeed, if the Government could achieve anything like this we would not be in the economic mess in which we find ourselves. Of course, the new system has no effect whatever on, and does not attempt to influence the level of, rates which any local authority chooses to fix any more than did the old system. We must, I suppose, be grateful for that. But as rates have no effect on the Government's PSBR strategy they are really irrelevant to the debate. In that respect I repeat that the new system is no different from the old one.

The main purposes of the block grant system are to meet the criticism that the old methods failed to assess need accurately enough and to see that the overspenders, the black sheep, do not get more than their fair share of the cake at the expense of the rest of the flock, because previously past expenditure was included in these calculations. Nobody disputes those objectives, but it is the methods of achieving them which are in question.

The local authority associations believe that the present system, for all its faults, could have been amended to achieve the same objectives as the new one, and the evils in it—and there are defects—could, by discussion and by talk, have been removed. The basic suggestion which the associations have made, and which I shall not go into in great technical detail, involves what is called "close-ending" the resources element of the rate support grant which could easily have curtailed the rights of over-spenders to a larger share of the cake. I am very sorry that the Government have so summarily rejected that approach. I am sure that further discussion of the point could have made it work.

As to the question of political manipulation, it is perfectly true that the old system of multi-variational regressionary analysis had its drawbacks. It is commonly supposed by the shire counties that the late Secretary of State, Mr. Peter Shore, weighted the thing very carefully in the direction of the inner cities. It is equally well known that the right honourable Geoffrey Rippon, the Secretary of State, weighted it towards the sparser counties, and as one of his constituents I was duly grateful at the time for that.

However, the new system gives the Secretary of State just the same built-in powers to vary the figures, with multipliers, as we have had before. There is no difference in that respect. Anyway, now we are to have the block grant proposals. It is not the block grant itself to which one should object, that is to say, the amalgamation of the needs and the resources elements into one grant. That is not in itself objectionable and it was indeed suggested to the Layfield Committee by the Department of the Environment many years ago. It is rumoured that it was suggested, again to Mr. Peter Shore, but was said to have been rejected by the pressure of local government leaders in the Labour Party at that time. I do not know, but perhaps someone will tell us. In any event it was rejected. That is not the problem—it is the assessment of the need, the process of calculating standard expenditure, which has suddenly been changed to be called grant-related expenditure. But a rose by any name will smell as sweet. That is the new feature on the scene to which local government is objecting.

In order to have the block grant one has to calculate the grant-related expenditure so that the two are part of the same process and are completely linked. The Government propose to make this assessment for each and every single authority in England and Wales for the first time ever. It is in effect making the decisions for each one as to exactly what they ought to spend. My noble friend Lord Bellwin said that the Bill did not involve telling local authorities what to spend. I beg to differ from my noble friend—I think that that is what will happen. It is to my mind the ultimate victory for the theory that "the gentleman in Whitehall knows best". The freedom for an authority to decide for itself is effectively removed in time, and while I do not go so far as others in saying that it is the total emasculation of local government, it does mean that power is, as I have said, translated to the centre in a dramatic and decisive way.

I think that two things will follow from that. First, local government will more and more have to put the blame on central Government for any failures to provide the services which people want and central Government will be thus inexorably drawn, if only in defence of their own calculations, into the decisions of policy which ought to be the prerogative of local government. Secondly, the pressure to spend up to the calculated figure of grant-related expenditure, which will be exerted by those whose business it is to call for increased public expenditure on every possible occasion, will become that much stronger. If an authority is providing a service at less cost than the grant-related figures think it should, it will be eventually forced by public opinion to spend up to that level whether it wants to or even needs to do so. We know, because it has been said in another place, that the Government cannot refuse, if asked, to publish these figures of grant-related expenditure at any time. This may mean that public expenditure as a whole will actually increase as a result of this new process. Nor does it in any sense equate with the Government's declared intentions of freeing local government from central interference.

We spent a great deal of time in the Layfield Committee discussing the assessment of needs. I seem to remember that three days were spent at Oxford and I suppose that we would have been wiser to go to Leeds in the event, but we concluded that it was difficult to be fair and that the accurate assessment of need was totally impossible. I am sure that the Department of the Environment will reach the same conclusion in due course.

We have also the multipliers. These are the weapons which are designed to give the Secretary of State even greater power to alter the figures. They could be political weapons of great strength and power. They should be defined very carefully. I acknowledge that they will catch the black sheep and that the "negative increment" will actually result in the black sheep getting less grant than the white. But is it worth paying this price to achieve this result and changing the whole system? Surely it is the aggregate expenditure which matters, and as I have said already this is under very strict control and always has been.

Your Lordships will note that a separate system is to be proposed for Wales, although I am not quite clear why. Your Lordships will also no doubt have noticed that Scotland is not covered by Part VI at all. The block grant proposals are not being suggested for Scotland. Scotland has just the same problems of diversity as England—perhaps even more so—but the rate support grant there is distributed by a formula which is quite different from the English system or the Welsh one, and is based much more on populations and demographic statistics and much less on past expenditure. It is, therefore, far less controversial, at the moment at least, and overspenders cannot automatically get a larger slice of the cake.

I should like to know whether the Government agree that this is a possible solution and whether or not they intend in due course to introduce this legislation for Scotland. I am sure they will reply that London, with its peculiar problems of high rateable values and all that is involved in being the capital city, does not fit into this formula. Indeed, it must be accepted that it does not fit into the suggestions made by the local authority associations to which I have referred. But, if we are to have a separate system for Wales and perhaps also for Scotland, then is it not possible that we should look at a separate system for London? This would allow the Government to put the squeeze on the Lambeths and the Camdens which seem to obsess Ministers so much. I suppose that quite a number of Ministers pay rates in Lambeth, and perhaps regret that at the same time. But it seems to me that it is a pity that London should upset the rest of the country in this way.

I turn to Part VIII which deals with the control of capital expenditure. This is yet another extension of central control. There exists today a perfectly acceptable system—which now works reasonably well—on loan sanctions, which have successfully kept the total of local authority capital spending very close indeed to the targets set. Even if the new proposals are much less restrictive than when the Bill was first introduced to your Lordhips' House at the end of last year, they will still constitute another permanent shift of power away from local authorities. By controlling spending instead of borrowing they will actively discourage an authority from making the best use of its resources—in particular, perhaps the use of its own locally-raised revenue to create capital assets. I am sorry that this is another loss of democratic freedom by local authorities. I see no need for this part of the Bill, and I hope that in due course the Government will at least accept a modest amendment which will allow some discretion to local authorities to spend up to, let us say, 1p or 2p in the pound without strings attached in order to do some of the things which they badly want to do.

It gives me no pleasure whatever and a great deal of anguish to criticise the Government over these matters. I do so reluctantly because I have never seen local authorities and their associations so united before, so unhappy and so uneasy, and I have spent a great deal of time in local government. Indeed, recently I have travelled the country very widely and the message seems to be the same everywhere. They cannot see why they should be so attacked by the Secretary of State so frequently—and I speak as an admirer of the present incumbent of that office.

But it is not local government which is so expensive; it is the services which local government provides at the request of Parliament. The local authorities do not as a whole—and I use a graphic phrase which was put to us by a witness to the Layfield Committee—"dangle a bottomless pit in front of the ratepayers !", which is not an easy thing to do. But I submit that it would cost a great deal more to provide these services from Whitehall, and councillors, it must be remembered, are elected to try to improve conditions and not the reverse.

With a few conspicuous exceptions. I think that almost all local authorities badly want to help the Government with their serious economic problems and play their part in their strategy. Of course, in due course they will make the block grant system work, just as they have made any other system work, and there have been many violent changes in recent years. We shall have to adjust to it. But they must reserve the right to warn of its dangers, and if only the Government could try to understand a little more why they fear these things and give some hope that they can look again in the light of experience if these things are as bad as may be feared, then I believe that the wounds which are opening between local and central government can be healed and the confidence which is now in danger of being lost, can be regained.

I turn briefly to the planning aspects of the Bill. I am sure that we shall return to this at great length in Committee. There is no doubt that the 1972 Act left the distinction between county and district councils in the matter of development control far too vague. No doubt the intention was laudable, but the effects have not turned out so well. In saying that I mean no criticism of my noble friend Lord Sandford, who was the Minister who piloted that Bill through the House. I am sure that he will have a chance to come back at me if he wants to. But in one county—not my own—there are now more than twice as many planners as there were before the 1972 Act became law, and that county has only six district councils. This Bill places the responsibility for development control on the districts. Most of that is already there, and we accept and welcome this. I personally, do not think that it will necessarily lead to better or quicker decisions, but it will end uncertainties in this field, and it must be right.

However, I submit that there is one important exception to this, and that is that the county council—metropolitan or otherwise—must continue to have the right to protect its structure plan. There is room for argument about structure plans. I, myself, am somewhat sceptical about the process, but we must not forget that the present Secretary of State was Under-Secretary at the time they were introduced, and they now exist over most of the country. Their chief merit is to bring a sense of realism into the plans of the competing districts, if these plans are to be ignored by districts—and I have enough experience and evidence to think that they may well be ignored—then all strategic planning is at risk, and it makes it very likely that public expenditure commitments on infrastructure and so forth could be seriously affected.

The Secretary of State's powers under the departure procedure are not as effective or as speedy. There is concern at the lack of power on the part of counties to have the ultimate say in this matter in certain clearly-defined cases, and this concern is by no means confined to county councils, but is worrying many other organisations. At this stage I shall only instance the Royal Town Planning Institute, which contains a lot of district planning officers as members, the CBI, the Royal Institution of Chartered Surveyors, the Council for the Protection of Rural England, the NFU, the CLA, about which my noble friend Lord Middleton may be speaking, the Town and Country Planning Association, and a great many more. I intend to raise this matter in Committee, if I may, and I hope that a clear mandatory duty will be placed on district councils to give effect to structure plans once they have been approved, and a discretionary power to the Secretary of State to enable him to refer applications to county councils.

There are omissions in this Bill, including the lack of provision for gipsies— something which was originally included—and other matters; but it is perhaps wrong to weary your Lordships with that at the moment. In conclusion, may I say that I am sorry to have again to criticise the Government and their Bill in some respects. Let us hope that the Recess will be an occasion for the noble Lord, Lord Bellwin, to look carefully at some of the matters and to come back to us in October with an open mind on some of the amendments which may be put before us.