Local Authority Expenditure: Capping (Hansard, 10 November 1997)

§ Baroness Farrington of Ribbleton
My Lords, yes. We are committed to ending as soon as possible crude and universal capping while retaining reserve powers to control excessive council tax increases.

§ Lord Evans of Parkside
My Lords, I am grateful to my noble friend for that reply. Does she acknowledge that if we are to hand back responsibility to local government, as the Prime Minister wrote in the Guardian last Monday, we must start by ending the capping of local authority expenditure? Does she accept that if councillors were given responsibility for fixing their own authority's council tax, coupled with annual council elections, the quality of candidates offering themselves for election would start to improve and councillors would become more accountable to their electorate? Finally, does she agree that if it is true that local government is the lifeblood of our democracy—I refer again to the Prime Minister's article—then it is the Labour Government's duty to rebuild and protect local government and not to seek to cripple it as the Tories did over 18 years?

§ Baroness Farrington of Ribbleton
My Lords, I should perhaps declare an interest as someone who was a councillor from 1973 until May this year. I agree with my noble friend that local democracy is the essential foundation of true democracy in any country. By working in co-operation with the Local Government Association and the appropriate associations for Scotland and Wales, we can end crude and universal capping when we have also put in place our policies; for example, best value and local performance plans.

Viscount St. Davids
My Lords, as the Government have so wisely chosen to remain within the national budget, as laid down by their predecessor, do they include local authority expenditure within that commitment?

§ Baroness Farrington of Ribbleton
My Lords, local government expenditure has to be seen within the Government's overall policy, which is to remain within public expenditure plans but to adhere faithfully to our 6 commitment to priority services such as education. There is therefore no conflict. The £835 million of extra education money going to local government, backed by the appropriate level of grant, is within the expenditure plans because the money will be taken from the reserve fund, something to which we committed ourselves before the election.

§ Lord Mackay of Ardbrecknish
My Lords, is the noble Baroness saying that the Government are going to remove from the statute book the powers to rate cap? I should be interested if she can clarify her Answer. If that is the case, will she kindly tell her colleagues at the Scottish Office who say in the White Paper on devolution that the new Scottish parliament will have powers to control local authority current expenditure through capping?

§ Baroness Farrington of Ribbleton
My Lords, the answer to the noble Lord's first question is yes. The Government will launch a White Paper next spring setting out their proposals for change. With regard to public expenditure and local government in Scotland, different rules apply with regard to Scotland at the moment. That issue will be dealt with during the devolution debate.

§ Lord Stoddart of Swindon
My Lords, is my noble friend aware that many people, certainly on this side of the House, will be delighted to hear that it is the Government's intention to remove rate capping? At the same time, will the Government ensure that the powers which were removed from local authorities are returned to them, including the power to raise money for local schemes which benefit people in those localities? Will we get away from the situation where local authorities fund only 15 per cent. of their expenditure from local funds, making them mere tools of central government?

§ Baroness Farrington of Ribbleton
My Lords, my noble friend is right. It is important that all our policies for local government are seen in the context of freeing it to take up initiatives; for example, through the renewed emphasis on public/private sector partnerships at local level. We, too, are delighted that even at this early stage within our commitment not to exceed the previous government's public expenditure plans, £159 million has been given to health authorities. Where health authorities and local authorities deem that that should be spent on care in the community, it will not be affected by current capping limits.