Local Government

HL Deb 06 March 2002 vol 632 cc258-305

3.8 p.m.

Lord Hanningfield

rose to call attention to local government, its structures, powers and responsibilities; and to move for Papers.

The noble Lord said: My Lords, I am pleased to open the debate on the structures, powers and responsibilities of local government. As many of your Lordships will know, I am the leader of Essex County Council and vice-chairman of the Local Government Association.

Improving people's lives through the delivery of decent public services and a decent environment depends on high quality local government. We welcome reforms that will make a positive difference to the communities that those of us in local government serve, but we doubt that the measures currently proposed by the Government will meet that objective.

As the leader of a local authority, I am committed 100 per cent to the delivery of real improvements to the lives of individuals and local communities. We have a responsibility to lead those communities. The Government have a responsibility to give us the freedom and the tools to undertake that leadership role effectively. Decisions affecting local people should be taken locally, within the communities affected by those decisions. They should be taken accountably, by people whose performance is directly judged by the local electorate through the ballot box.

In December, the Government published their local government White Paper, Strong Local Leadership—Quality Public Services. That paper contains many words with which, I am sure, noble Lords can agree. For example, we can support the commitment to deregulation and plan reduction, but I doubt that the Government can turn that rhetoric into reality.

For more than 100 years, local government functioned on the basis of one clause in an Act and one set of standing orders. During those years, local government was the engine of radical change in our society. The Government have introduced over 450 pages of regulation, guidance and direction. Those 450 pages of red tape will not encourage diversity and creativity in local councils or flexibility at the front line.

If the Government are genuinely committed to decentralisation, why have they not set a target for reining in the tremendous growth of ring-fenced grant? The Government, outwardly committed to devolution, have nevertheless overseen the proportion of ring-fenced money grow from 5 per cent in 1997 to over 12 per cent this year and a projected 15 per cent for next year. That growth represents a substantial failure on behalf of any government who really believe in devolution. It is another example of creeping centralisation. It is an inefficient way to run a country and it is an affront to democratic accountability.

In their drive to measure their way to success, the Government propose that soon we should all be subject to a comprehensive performance assessment by the Audit Commission. We support performance assessment, but we have grave doubts about the Government's proposals. All councils will be branded as "high performing", "striving", "coasting" or "poor performing". Being a "coasting" council may have some attractions for tourism purposes but, joking aside, this kind of categorisation is offensive, crude and fuzzy. The Government have already stated that they expect most councils to fall into the "coasting" category. Why then are they bothering to spend taxpayers' money on finding out what they already know?

It has been suggested that that kind of categorisation will inform local people. It is said that they will finally get to know how well their authority is performing. But, frankly, I think that is ridiculous. Local people know whether the roads are full of potholes, whether their rubbish is collected, whether their sons or daughters go to decent schools, whether the elderly are looked after or whether their council tax bills are going through the roof—and they will vote on the basis of that knowledge. People do not need an expensive comprehensive performance assessment involving hundreds of bureaucrats running around the country to tell them what they already know.

We welcome performance assessment, but we question the need for extensive and lengthy field visits, annual reviews and crude categorisations. We are already spending £600 million a year on inspection. How much more is it going to cost taxpayers? Perhaps it will cost £1 billion that might be better spent on children, the elderly or the sick.

The Green Paper on planning was also published in December of last year. Its objective was to achieve a better, simpler, faster and more accessible system. We agree with that objective. Reform of the planning system is necessary. We would like to see less red tape, greater certainty for business and a more streamlined appeal process. What we do not want to see is the exclusion of local communities or planning decisions taken with no regard for accessibility or accountability.

I have serious doubts as to whether the proposals outlined by the Government will deliver a more streamlined process. At the moment a county council produces a structure plan that provides the framework within which district councils prepare their local plans and determine planning applications. This process involves detailed public consultation. The Green Paper proposes that those county powers should be sucked up to the regions. Difficult planning decisions will be determined hundreds of miles away by bodies that are inaccessible and, in large part, unaccountable.

In essence, the functions of the counties will be transferred to the regions and the districts, but the Government have failed to advance any evidence that the counties are not delivering or that they are the cause of the planning problems that must be tackled. In fact, one could search high and low in the Green Paper to locate any criticism of county councils in relation to the exercise of their planning functions. The only reason given in the Green Paper for removing strategic planning responsibility from counties is in paragraph 4.37, which states that the counties are no longer the most appropriate level at which to deal with strategic planning issues because many of the issues cut across county boundaries.

The same is true of course with regard to the regions. For example, the Thames Gateway cuts across the eastern and the south-eastern regions. Do we really think that value will be added to the planning process by ensuring that the people of Norfolk have an equal say in the planning framework for the Thames Gateway as will people in Essex or Kent, or that there will be fewer boundary disputes in the eastern region with a system based on 48 authorities rather than six?

Far from the counties coming in for criticism, the Green Paper makes it clear that most of the problems in planning have generally resulted from the weaknesses at the district or regional level. For example, paragraph 4.45 states that at the regional level: there has been a tendency to avoid making the hard strategic choices … Instead lowest common denominator approach is taken, which in the long term can damage development across the region". At the district level around 13 per cent of local plans are still to be put in place and many more are overdue for updating. It is Alice in Wonderland politics to transfer responsibility from the bit of the system that is working to the bits of the system that are not.

We are told that business and other stakeholders are clamouring for reform. That is true. They want to see changes made to the planning system, and so do we. The changes that the CBI and the House Builders Federation have been lobbying for are changes to the arrangements for development control. They seek a speeding up of the decision-making processes, not a wholesale massacre of the existing planning structure. Greater confidence in the outcomes of planning proposals will not be delivered by the plans set out in this Green Paper.

The proposals are also expensive, with one-off costs of £60 million and ongoing annual costs of an additional £62 million. On top of those financial costs there will also be significant capacity problems for small district councils and for regional authorities which simply do not have the staff to carry out these new functions.

Do the Government's proposals deliver a more accessible and accountable planning process? The short answer to that is no. The authority that prepares the regional strategy will be a quango; it will not be democratically accountable. And it will be remote, sometimes hundreds of miles from the place where its decisions will have an impact. There is no question that the Government's proposals dilute democratic accountability and reduce access to the planning process by pushing decisions upwards away from the people affected by those decisions.

We would like to see a more balanced and less dogmatic approach from the Government—an approach that builds on the strengths of the current system while tackling the real problems that we all recognise exist. I hope that the Government will take on board these comments and look again at their flawed proposals.

We are now also awaiting a further paper from the Government on the development of the regions. The Government seem to be in turmoil about their policy in this area. In the spirit of friendship perhaps I may offer them some help.

If regions were to be based on genuine historical units with a coherent identity—as they are in Europe—and if they were to be given real power, devolved from central government, we might support the concept. Essex, for example, has been a unit of government since it was the Kingdom of the East Saxons in 600 AD. It has a population of 1.6 million, which means that it is larger than 13 American states and many European regions. Currently we are part of the eastern region. We have nothing against our colleagues in Norfolk and Suffolk, but nor do we have much in common with them. If we are to have regions, then let us have real regions based on counties. That would make more sense than the meaningless entities dreamed up for the convenience of bureaucrats in Whitehall.

Local government must be freed. It must be freed from bureaucracy—performance indicators do not deliver services. It must be freed from central control. Whitehall cannot know what is best for local communities. Why should the Government and the Audit Commission rather than local voters decide whether local authorities have the right to exercise freedoms?

To reinvigorate local democracy, we need new thinking. To usher in a new civic dynamism, we need a new vision. We shall not attract the Chamberlains or the Herbert Morrisons back into local government if we fetter it with petty financial controls. We would urge the Government to be more bold on local government finance, more sophisticated on planning and more imaginative on regions. I look forward to hearing the views of noble Lords. I beg to move for Papers.

3.20 p.m.

Lord Harris of Haringey

My Lords, I apologise to the noble Lord, Lord Hanningfield, for missing the beginning of his remarks. I am guilty of some discourtesy and I apologise to him for it. I congratulate the noble Lord on introducing what I hope will be an extremely wide-ranging and broad debate in which we can look at the full range of issues concerned with local government.

I declare an interest. For almost 24 years I have been a member of a London borough council. I relinquish that role in May and do so with a sense that perhaps I remained in it too long. However, I do so in the knowledge that at the point I give up I shall still be some eight years younger than the average age of local government councillors across the country. That suggests to me that something perhaps needs to be done about adjusting the age balance of local authority councillors.

I share with the noble Lord, Lord Hanningfield, the delights of serving on the executive of the Local Government Association where many of these issues have been discussed. Since May 2000 I have been an elected Member of the Greater London Assembly, a new form of local government which may form the model for new types of regional structure in the future. We await the White Paper with interest.

I agree with the sentiments expressed by the noble Lord, Lord Hanningfield, that, for some time, there has been a need for new thinking in relation to local government. My contention—it probably would not be his—is that much of that new thinking has been contained in the successive White Papers produced by the Government since their election in 1997. Those publications have required those of us who are active in local government to rethink from the start how local democracy operates and to develop new ways of working in relation to the delivery of services and the economic, social and environmental development of the areas we represent. That has been extremely important.

As to the noble Lord's final rallying call, I believe that the first shoots of the development of new freedoms for local government are contained in the latest White Paper. When my noble friend replies to the debate, I look forward to his reassurance that those new freedoms are on the way.

Looking back over my period in local government, I have seen some very dramatic changes, which I hope your Lordships will feel have been beneficial. Certainly in my early years in local government, our entire preoccupation was with direct service delivery—the services that the local authority itself ran and organised on behalf of local residents. We have gradually moved on. In my early years as leader of a local authority I spent all of my time on inward-looking meetings; by the end of that period most of my efforts were devoted to working with other agencies in outward-looking arrangements to ensure that services were delivered in a particular way.

We have seen the development of much more partnership working. Some of it is underpinned by statute—for example, the crime reduction partnerships introduced following the crime and disorder legislation. Some of it has been as part of financial frameworks to deliver regeneration where partnerships have been created to respond to bidding regimes from central government.

A new approach has been developed which underpins what the Government call in their successive White Papers "community leadership". This is about recognising that local politicians are there on behalf of local communities to design what is needed for those local communities. That may not necessarily be achieved through the service delivery of the local authority; it may be better delivered—and will frequently only be delivered—by working with other public sector agencies and private agencies. That has been at the core of partnership working.

When my noble friend replies to the debate, I hope that he will recognise that the democratic accountability elements that the local authority in its community leadership role brings has to be at the core of effective local partnerships. It has been a major and important change.

The second change—the creation of the executive/ scrutiny split—is much more recent. It has not been without its controversial moments in many local authorities, but that has been as much about people adjusting to a new way of working as to anything else. I became a less prominent member of my local authority at the point at which the executive/scrutiny split happened. As a back-bench member of my local authority, it is much easier to find out what is happening through a clear process, with the transparency that is offered by an executive structure and scrutiny mechanisms to keep track of what is going on. The transparency offered by the new arrangements is part of a process which I hope will lead to the reinvigoration of local government.

This is a very welcome debate. I hope that it produces a commitment from all present to the rebuilding of local government and a recognition of the primacy of a system of local democracy where there can be genuine community leadership. In my view, if local democracy means anything, it means local people electing local councillors to act on behalf of local communities, to make things happen and to work with other non-elected bodies, whether in the public or private sector, to find the best route possible to enable the local community to meet its aspirations. That is what local democracy is about and it is what the Government's agenda for rebuilding local government is about.

3.26 p.m.

Baroness Maddock

My Lords, I thank the noble Lord, Lord Hanningfield, for giving us the opportunity to debate local government. I shall concentrate mainly on issues surrounding powers and responsibilities.

The power to promote the environmental, social and economic well-being of the community was an extremely welcome addition to the Local Government Act 2000. It gives the possibility of allowing local authorities more freedom in the way they give leadership to their communities. It is early days and there is very little clarity about the conditions under which councils can use the new power. This illustrates the difficulty of expecting fundamental change to follow a limited increase in change of powers if the powers are not matched by wide-ranging financial independence. It is quite clear that budget pressures on councils have prevented some of the reforms that we would like to see.

Not for the first time we on these Benches have said that we would like a constitutional settlement with local government. In addition to righting the financial balance of power, it is essential that local government is given the constitutional power of general competence.

Some of the ideas we have put forward are reflected in the Government's White Paper. I suspect that many noble Lords will discuss them today. For example, we welcome the Government's vision of more freedom and flexibility for local government and less central government intervention, but it is not clear from the detailed proposals in the White Paper that this will be delivered for the majority of councils.

There are some moves in the right direction—for example, the freeing-up of capital finance, reductions in the number of statutory plans and the abolition of the inequitable council tax benefit subsidy limitation—but accountability would be better obtained by shifting the emphasis of funding to the local level and away from central government grants.

It is true that the White Paper pledges to reduce the amount of ring-fenced grants, but this has not been backed up in the local government financial settlement announced for the coming year, which includes a massive hike in specific grants.

The new freedoms given to some councils are very welcome, but why are they offered to only a few? Very prescriptive proposals for poor performing councils will tie them up in bureaucracy, inspections and assessments instead of devoting their resources to improving performance. The performance assessment system described as "balanced scorecards" —we are really talking about league tables—are yet another form of central control. As has been said with different emphasis by speakers on different Benches, local authorities are accountable to local residents—to those who elect them. We believe that councils should have an autonomous right, not one given to them for good behaviour.

All councils need the freedom to find innovative local solutions to local problems, not just those that are high in the league tables. Local people need to hold the councils to account. Therefore, the systems need to be transparent and understandable. In the White Paper, the Government proposed the introduction of four categories. "High performing" and "poor performing" are fairly understandable; but would the general public understand "striving" and "coasting"?

We welcome the prudential framework for capital finance—which is largely based on the ideas put forward for some years by my Liberal Democrat friends at the Local Government Association. However, the Government will need to flame their reserve powers very carefully. We should have preferred the decision on exceeding borrowing guidelines to be made by local people in a local referendum, rather than by the Secretary of State.

Turning briefly to my own area, housing, the freedom to borrow against housing revenues will be introduced. That could assist authorities which do not want to pursue stock transfer. But the key factor is how much freedom the local council will be given. It depends on the extent to which any surplus rental revenue can be retained locally and used for capital funding.

The Government have promised significant additional funding to raise the standard of council housing. But again, there are strings attached. Local councils will be able to access the money only if they have established an arm's length management company to run housing management. Furthermore, that company must be high performing—it must have received two or three stars, which very few organisations, if any, have so far received.

Despite the rhetoric of the White Paper, it would appear that the Government are still keen to hog control, and there is little action coming from the White Paper. Perhaps I may quote from a briefing sent to me by the Local Government Association, which holds a similar view. It is concerned that if the White Paper is truly to deliver better local public services, the rhetoric must be turned into action. The association seems to think that there has been little progress on a large number of issues. It states: The Secretary of State, the Rt Hon Stephen Byers, announced at a conference at the LGA on January 18th that an implementation plan setting out how each proposal would be progressed and a timetable would be published. However, that plan has yet to appear". That is our main concern. There are many good intentions, but very little has actually changed.

3.33 p.m.

Lord Waddington

My Lords, I think that my noble friend would agree with me that it would be unrealistic to talk about local government without talking about the threat of regional government. I use the word "threat" advisedly. It is not so long ago that the Prime Minister's spokesman said from No. 10: We need regional government like a hole in the head". After that, someone decided that it was right to give Mr Prescott something to do and, unfortunately, the bandwagon started rolling. Unless we are very careful, we shall finish up not with a hole in the head, but in the condition in which Sir Richard Mottram found himself on 12th February, along with his department and Mr Sixsmith.

There are some matters on which we can surely agree there is common ground. First, regional government certainly cannot be viewed as the English answer to Scottish devolution. It does not answer the West Lothian question. It does not right the wrong of Scottish Members at Westminster being able to vote on English matters when English Members of Parliament at Westminster cannot vote on Scottish matters. And anyhow, no one suggests that the powers that would be devolved to the regions would be remotely like the powers to legislate which have been delegated to the Scottish Parliament.

Secondly, regional government will not increase expenditure on public services. People in the North East may look over the Border at Scotland and envy what they look upon as better services. But those better services in Scotland are not made possible by the existence of a Scottish Parliament. They are the result of the Barnett formula, and the fact that Scotland receives a far higher proportion of public expenditure per head than we do in England.

Lastly, regional government will not bring government closer to the people. That point was made clearly and fairly by my noble friend. The recent Green Paper on planning is just one glaring example of how it is already proposed that the county councils should lose power to the regions. That does not mean government closer to the people. In my part of the world, Lancashire, it means taking it further away.

What sort of regions are these? They are entirely artificial creations which rarely reflect any kind of regional loyalty. People in north-east Lancashire do not feel a special brotherhood with the citizens of Birkenhead. People in Cumbria think of themselves as Cumbrians; they do not think of themselves as "citizens of the North West".

The pretence that in the North West, for instance, there is widespread interest in regional government is laughable. In five regions, Church of England Bishops have taken the chair of regional conventions. Chris Moncrief, who is known to many of us in this House and is a great friend of Parliament, got the matter entirely right when he wrote a rather nice piece in the House Magazine on 15th October. He stated: It is astonishing how easy it is to fool some of the people some of the time. The European Union has, apparently, been impressed by what is considered to be the 'clamour' all over Britain for elected regional parliaments. This has been engendered, in some degree, by the emergence of the grandly named North West Constitutional Convention. Further investigation has shown that this organisation, if it is an organisation at all, is housed in a dilapidated shed at the back of a pub". In replying, perhaps the Minister can respond to the following point. There may be some little comfort for the North West. The 2001 Labour manifesto contains the statement that regional government will not be inflicted on any part of the country unless, first, the people in the area vote for it; and, secondly, predominantly unitary local government is established". We in the North West have three county councils, 24 district councils and 18 unitary authorities. Can I take it that the test is not met in the North West, that the Bishop of Liverpool can take a rest, and that the shed at the back of the pub can be re-let?

It should be understood that, before anyone has voted for regional assemblies, regional government is already burgeoning. Both RDAs and Government Offices for the Regions are growing. A paper by Newcastle university quoted an official as saying that the latter are not outposts of the unitary state but could become the nucleus of a regional civil service.

We can be sure that, as these bureaucracies grow, we shall hear more and more the false argument that as we have a regional bureaucracy we need a regional assembly to bring it under control. That is absolute nonsense. The last thing an elected assembly would do would be to bring bureaucracy under control. As the bureaucracy does more and more to justify itself to the assembly, the more self-important and pleased with themselves will the assembly members become. Elected assemblies will start as talking-shops, pontificating about planning and transport; but in no time at all they will demand a wider and wider role and they will be costly millstones round the necks of the people.

And that is not the end of it. Regional government does not just mean expensive, pointless bureaucracy and deadbeat councillors drawing large allowances. It is a lot more insidious than that. On 7th July, the Bishop of Liverpool told his constitutional convention that there was a big question as to whether regional assemblies would bring stronger national cohesion. It is a good question. How can it be argued that nine English regions, each with an office in Brussels and each competing with the others for handouts from the EU, are likely to make a happier and more united nation?

For some people that is part of the purpose. For them, maintaining our national identity is anathema. Just as they rejoice when they see Euro laws diminish our Parliament here at Westminster, so they cheer for regional government, which will bring us one step nearer to a Europe of the regions and put another nail in England's coffin. The Prime Minister was entirely right: we need regional government like a hole in the head.

3.40 p.m.

Lord Woolmer of Leeds

My Lords, it is always a pleasure to follow the noble Lord, Lord Waddington, in his vigorous statement of views on a White Paper that is yet to emerge. Like him, I look forward with great interest to the publication of the White Paper on regional government.

I join in the congratulations to the noble Lord, Lord Hanningfield, on introducing the debate and apologise for the discourtesy of having arrived in the Chamber a few moments into his speech. I also declare an interest in two businesses that from time to time advise companies on their relationships with local authorities.

I congratulate the Government on their record over the past four or five years, specifically on the increase in financial support for local government, which has been ongoing and strong since Labour took office. I also congratulate them on the increased stability and certainty that they have introduced to revenue support for local government. However, there remain many things to do and I want to look forward as well as addressing past performance.

I share the Government's view, expressed in the White Paper of December 2001, that thriving communities and strong democratic leadership go hand in hand. Effective local democracy is essential to strong community leadership and improved service delivery. I also agree with the Government that there are two important principles of public service reform on which they and local government should concentrate. The first is a national framework of standards and accountability. Secondly, the effective delivery of national standards requires the devolution of real power and responsibility to local leaders and front-line staff.

In applying the first principle, the Government say that national priorities must be more clearly identified in future, but acknowledge that that will not be effective if they simply specify targets from above. Despite those sensible sentiments, the White Paper and the Government's actions provoke the occasional feeling that their fundamental concern is to ensure that local government does what central government want, but does so more efficiently and effectively, rather than to develop local choice and local democracy. Much of what the White Paper says about improving efficiency and effectiveness in delivering public services locally is sound, but if local community involvement programmes and local public service agreements between councils and government are largely devices to get what central government want rather than to strengthen local choices, local decisions and local democracy, we may not revive democratic leadership and local democracy as much as the Government—and certainly I—would wish.

Perhaps the most open test of the proclaimed desire to devolve real power and responsibility from the centre will come in the Government's promised proposals on regional government. As I have already said, I look forward to those proposals with great interest.

The new political arrangements seem to be settling in more quickly than sceptics predicted. The distinction between an executive role and a scrutiny role, as my noble friend Lord Harris of Haringey, said, is working in most authorities, although the understanding and development of the full potential of the scrutiny role of back-bench councillors is, in my experience, patchy between and within local authorities.

Slowly but surely, I sense that a change in culture is emerging, as local councils see that the new arrangements open up opportunities for the constructive development and oversight of policies and their implementation, as well as opportunities for strengthening wider community and agency involvement in local decisions.

That wider role of promoting and facilitating community involvement and helping to bring together the interests and actions of different public and private agencies requires a great deal of skill and historically different skills for elected councillors and their officers. I therefore welcome the Government's clear recognition in their White Paper of the need to support local government in building capacity and skills in strategic leadership, in effective overview and scrutiny and in partnership development, partnership working, performance management and project management.

There is also a need to build capacity and skills in the wider community and agencies, both public and private. In my experience in Yorkshire, the councils may begin to see the need to develop partnerships and capacity, but they often find that the other agencies that they are dealing with do not have the same background and capacity to engage in a partnership on an equal basis. I hope that the Government will look at wider capacity-building issues as the process goes forward to see whether there are ways of building capacity and skills not only in local government, but among the many community partners, public and private.

It is essential that the hopes and aspirations raised by community involvement and partnership development lead to positive outcomes at local level. It could be all too easy for local authorities to slip back into running the show locally, with decreasing commitment to the initial ideals of involvement and partnership.

I remain sceptical about the Government's enthusiasm for mayors. The lack of public support does not surprise me. There is a conflict between the role of an all-powerful mayor and the process of widening participation and developing stronger local democracy at local authority level—not at regional level, as in the case of the Greater London Authority. Having a wider executive and a larger group of backbenchers provides a healthier balance and a wider pool of current and future leaders of local authorities and local communities.

The one disappointment in the White Paper was that the Government view poorly performing councils, under their new system of performance assessment, as particularly ripe for having a mayoral system imposed on them. Poorly performing authorities will need not a bureaucratically efficient solution to the failure of democracy in action, but a combination of the other sensible measures proposed in the White Paper, together with a major programme of capacity-building within and outside the authority. In that way, a new, stronger local democracy can re-emerge alongside improvements in performance.

I welcome the White Paper and the Government's performance to date and I look forward to the implementation of many of their proposals.

3.48 p.m.

Lord Bowness

My Lords, I, too, am grateful to my noble friend Lord Hanningfield for introducing the debate. As the leader of a major local authority and an officer of the Local Government Association—to say nothing of his wider perspective as a member of the Committee of the Regions—he is well suited to address the House on the subject. Although my experience of 30 years in local government and 18 years as a leader is not so fresh, I am depressed by how little things have changed and how much the conversations we are having today are the same as those of 20 years ago.

Interest in local government and in freeing it from central control is not so much the prerogative of one party as the prerogative of whichever party happens to be in opposition. The rhetoric of the 1997 Labour Party manifesto has produced few of the promised freedoms, although there have been some gestures in that direction—including the White Paper published in December to which my noble friend referred.

I have no doubt that the noble Lord, Lord Filkin—whose experience of local government from a previous incarnation is considerable—may disagree with my assessment of the Government's approach. I hope that he will enlighten us on how performance assessment frameworks will work by categorising the speakers in this debate as high performing, striving, coasting or poor performing.

As to gestures in the direction of freedom which have not proved of enormous substance, I recall that elected mayors were to be the salvation of local democracy. It is clear that the public have little interest and even less enthusiasm for the idea. Any attempts to force elected mayors on communities will be doomed to failure. In view of the lack of interest and take-up, what do the Government propose? Have they any plans for what should follow?

Part of the trouble has been a failure to realise that a great idea in Europe or the United States may not translate easily to England. We cannot cherry-pick elements from different political systems and expect them to flourish here. In this country, elected mayors would have too few powers and little control over small finances to produce any interest.

The cabinet idea is not one that I oppose but it will be fraught with difficulty if local authorities are maintained at their present size. The noble Lord, Lord Woolmer, says that the cabinet system is working, which it is—but it is not popular. The idea that scrutiny and community representation will prove a worthwhile task for the balance of the large number of local authority members left after excluding the cabinet is expecting too much. Many people enter local government because they want to do something positive for the communities they represent.

No doubt London will be paraded as an example of advances in local government, but not enough trouble was taken to understand the proposals. I have asked in the House on more than one occasion whether the Government were creating a regional authority or a local government institution. I was told once that the Government were creating something unique. That misunderstanding seems to continue. The noble Lord, Lord Harris, referred to a new local government institution—whereas the extensive advertisements for staff issued by either the mayor or the GLA often refer to it as a regional authority. Any suggestion of local government reorganisation is denied but that is precisely what it has been.

Out there on the streets, there is little to show for it. I ask the noble Lord, Lord Filkin, to say whether London is a better place for what has been done. Is that the impression given? At grass roots level, has any progress been made towards making London a safer, cleaner place with better transport than previously existed? I ask the noble Lord to particularise the achievements of the mayor and the Greater London Authority as he sees them.

Council tax bills in London, as elsewhere, are rising disproportionately with inflation. The claim that the electorate of London will see no more difference than 3p at band D rings hollow now. Compulsory competitive tendering was abolished with an enormous flourish and the trumpet call of best value was introduced. That brought its own problems. On two occasions in your Lordships' House, I was assured that the cost of implementation was in the region of £50 million per annum. A letter in the Library dated 27th April 1999 confirms that point, yet in September 2001 the Joseph Rowntree Foundation, a respected institution, produced a paper showing that the estimated annual cost of the inspectorates covering local government is around £600 million. Somebody's figures are incorrect. An increase from £50 million to £600 million seems almost impossible, given the Government's great record on inflation. I would be interested to know the reason for that discrepancy.

Across the country, local authorities are finding a gap between the sums that they need to spend and grant support. It is depressing that the DETR continues to produce the same kind of answer we have always heard—that with the grant settlement, local authorities should be able to maintain services and council tax rises will not go beyond whatever percentage they choose. That leads to no accountability and total uncertainty on the part of the public. Many questions could be raised about how local government is progressing but we do not have time to raise them all today.

3.56 p.m.

Lord Greaves

My Lords, I thank the noble Lord, Lord Hanningfield, for introducing this debate. It was interesting to hear the impeccably new Labour presentation by the noble Lord, Lord Harris of Haringey, of the Government's vision for local government. He said that local councillors should be elected by local communities with the power to carry out their wishes. I want to talk about one way in which that ability is being severely curtailed. I refer to rules on declarations of interest, which are being implemented in a rigid and draconian way that is getting out of hand and preventing councillors doing their job.

Traditionally, councillors declared any pecuniary interests. That requirement has been extended to a wide range of non-pecuniary interests. In most cases, the individual withdraws from the meeting and does not vote. However, the rules have been tightened up so much that it is getting silly. The proposals from the Commissioner on Standards in Public Life and the production of a code of conduct for local councilors are fine as far as they go but many councils are going much further. That is sometimes due to a series of rulings by the local government ombudsman, particularly in respect of planning applications, which have overemphasised the quasi-judicial role of councillors and downgraded their representative role. In many parts of the country, rules are being imposed on councillors by over-zealous officers—many of whom seem to have a growing paranoia. One suspects that some have their own agenda on stifling councillors and issuing them with instructions.

There is a sheaf of examples but I have time to mention only a few. A Liverpool city councillor got into serious trouble for voting on the future of one of the city's main football grounds after it became known that he was a season ticket holder of the club—along with thousands of other people. It was held that he therefore had an interest and should not have participated in the vote.

Last summer, Kirklees council in West Yorkshire voted to close a secondary school. One of the councillors who voted for that decision was a governor appointed by the council to a neighbouring school. The matter eventually went to the Queen's Bench Division on 28th July 2000, when it was decided that councillor should not have voted and the closure decision was overturned. The school is still open, partly because of a subsequent change in political control of the council. The point is that something which many of us in local government traditionally regarded as a non-declarable interest—representing the council as a school governor—turns out to he a declarable interest and gets the whole council into real difficulty.

There are also some quite foolish examples. A friend of mine, Councillor John Fletcher of Stockton-on-Tees Council, took part in deciding a planning application affecting his whole ward. However, after a complaint by the applicant, the potential developer, the council's legal officers ruled that the decision was invalid because John Fletcher was a friend not of the applicant or anyone with an interest, but of one of the principal objectors. It was ruled that he should not have taken part in that decision, and the whole process had to be repeated. Moreover, the council had to re-decide the application without half a dozen councillors who had friends who would be affected in one way or another by the decision. We therefore return to an issue that has been debated before in your Lordships' House: what is a friend and who is a friend? In local government, however, declarations of interest can stop one from participating and voting. It is therefore a much more serious issue.

Another friend of mine, Councillor Keith Orrell, in Ryedale, in Yorkshire, was debarred from taking part in a decision on whether to improve some derelict land owned by the council, by turning it into a little park. On the advice of the legal officer, he was excluded from the decision because his wife had actively campaigned for the development. Her only interest in the matter was, as a citizen, to seek improvement. Consequently, however, he was ruled ineligible to participate in the decision. That is nonsense. If we were not in your Lordships' House, I would call it an unparliamentary word beginning with B—but I shall not.

Is an interest of a councillor's wife an interest also of the councillor? It is getting to the stage that those who campaign in the community in ward elections or on a given issue cannot participate in council discussions and decisions on those issues because they have expressed a view on them, particularly if they involve planning applications. Such applications may well be the main issue in an election campaign. The restrictions are a denial of the democratic process, and I believe that the Government and others need to step in, find out what is going on and stop it.

It is not happening everywhere, but a cancer is creeping through local government, particularly in relation to legal officers in many places who are trying to impose restrictions. Given those restrictions, if one is the sole councillor for a small rural ward comprising not many more than 1,000 electors, how can one properly represent that village or small town? One will undoubtedly live in the ward, work there and belong to many of its local groups. One's children may attend the local school, and one may attend the local church. At least every four years, one will knock on its doors. How on earth can one be an effective councillor if one must declare an interest in relation to anything at all to do with that village or any of its groups? It is a spreading cancer at the heart of local democracy, public involvement and the councillor's role as representative, as the noble Lord, Lord Harris of Haringey, said, of his community.

If we were in a council chamber and not in your Lordships' House, I would not have been able to talk about many of these issues because I have been talking about some of my friends.

4.4 p.m.

Lord Bridges

My Lords, at seven minutes per speaker, my arguments must be severely compressed. Many of my worries on this subject relate to the handling of planning issues by local authorities, in which I have had some involvement and experience. However, I shall omit these matters entirely as we are expecting a new White Paper on them. I urge the Government to bring forward that White Paper soon so that we may debate their far-reaching ideas, exposed in the Green Paper, before the Summer Recess. This timetable is surely necessary if the issue is to be included in the next Queen's Speech.

What are the Government's plans regarding the regions? The noble Lord, Lord Bowness, mentioned that subject. As he said, it featured briefly in the 1997 Labour Party manifesto, but we have not heard much about it since. So much for the mandate theory of government. However, what is the future relationship going to be between the regional development agencies and local government? RDAs currently lack any proper local method of democratic control, and those in charge of the RDAs are nominees of central government. Do the Government understand that the regional concept is not universally popular in England? It has some appeal in the North East and North West where they need to replace old industrial structures, and there is also some support in the South West where Cornwall feels left out, but I doubt that it has much support elsewhere.

I also draw the Government's attention to the fact that the county is still the focus of attention for the majority of the population. The county is our oldest administrative unit, dating back to Saxon times. As he became victorious in reclaiming the Danelaw, King Alfred introduced the county throughout his territories. The shire was also used by the Normans for raising troops in medieval England, taxation and returning Members of Parliament. The British Army has long been based on regiments recruited on a county basis—a system much admired abroad. Of course the scene has changed with the growth of our great industrial cities but, to this day, the county is responsible for police forces, transport, planning, the environment, highways, consumer protection and personal social services. The county is often—I dare say generally, if one does not live in a large city—the unit with which the citizen most readily identifies himself. It is therefore with regret that I notice the Government's apparent tendency to displace the county by using their power to finance the RDAs.

I suggest that the Government have many difficult problems on their plate in the area of regional institutions and policies. I urge them not to destroy the units we have that enjoy local support, to eschew one-size-fits-all formulas which could be a recipe for confusion and perhaps uproar, and to turn away from the authoritarian trend of channelling investments to bodies—the RDAs—appointed from London with inadequate knowledge of the regions. Above all, I suggest that they should examine with care the cost of establishing new regional authorities, the cost of finding premises for them, and the cost of compensating current local government employees who will lose their jobs. Instead, we should concentrate on making better what we have now.

The key to this will be to improve the economic resources available, particularly at the county level. It is not impossible to streamline procedures and to concentrate resources where they are most needed. We may also need to consider giving local authorities greater revenue-raising powers.

An idea that has long intrigued me is this: could one rearrange the collection of VAT and income tax on a county basis and empower local councils to raise a small and carefully limited extra amount of tax from those resources? A national equalisation formula, like the Barnett formula, would no doubt be needed for areas with special needs. I do not expect the suggestion to meet with much support, but it does seek to remedy what seems to me to be the basic flaw in the current system, whereby central government set the standard of services to be provided but give local authorities only 60 per cent of the resources needed. Authorities that take pride in providing their own first-class services for education and health in their areas may well find it easier to gain support for somewhat higher contributions from local taxpayers than in the case of taxes raised at the national level. This would also reverse the centralising trend of the past 30 years, which I believe has been the greatest problem faced by local authorities. I submit that practical decentralisation would be the best way of reinvigorating local government in our nation.

4.10 p.m.

Baroness Knight of Collingtree

My Lords, I am both undermined and overwhelmed to see from the list of speakers that I have been emasculated. It would seem that I am no longer female but male. It is important to make it clear to your Lordships at the outset that I regard that as a vile calumny. I am a woman; I like being a woman; and I have every intention of remaining a woman.

People elect councillors hoping to get good local services, police on the streets, well-maintained roads, good schools and assistance for those in need who are unable to help themselves. That costs a lot of money and if there is not enough the council either has to increase taxes or cut services, both of which are electorally extremely unpopular.

However, there is something else that should be done right at the start when services and budgets are planned. I was a councillor for 10 years before I entered Parliament and I have never forgotten the advice that I received when I started: always spend public money twice as carefully as you would spend your own and never waste it. How I wish that that advice was followed today.

Last month—your Lordships who were here for Questions will know what I am about to say—I received a letter addressed to the occupier of my house, which happens to be me by a strange coincidence. It was from Northampton borough council's private sector housing department, informing me that a surveyor would be coming to inspect the condition of my house and its accommodation and to assess my housing needs. It said that 2,500 owner-occupiers had been selected at random from the council tax register and all who gave an interview might receive £100. What is the council doing poking and prying into people's private homes?

If I had applied for council help, or if the council was checking rateable value, or if I were not keeping my house as I should—it is a grade II listed historic house—I could understand the demand to inspect. But none of those things applied. Earlier this afternoon it was suggested that inspection was necessary because some owner-occupied houses were in bad condition. However, such houses show from the outside that they are in bad condition. I see no reason why thousands of interviews should take place in perfectly good houses. It will cost a great deal of money.

If I were incapable my family would step in and if I had no family the council would be informed by people such as family doctors, neighbours, daily helps or even milkmen. It is totally unnecessary for the council to snoop around private homes to find out what they would be told anyway.

Surveyors do not come cheap. To employ enough to visit 2,500 people in their homes must cost a lot. Trying to bribe owner-occupiers with £100 of ratepayers' money is appalling. If all that were going on while a rich council was providing all the services that ratepayers could possibly dream of, it would still he a bad idea. But far from it! Northampton desperately needs more police on the streets; many roads are a disgrace; valuable museum collections are being dispersed and curators are being sacked; and library services are cut.

I rather think that the scheme may also be breaking the law. I tried to find out this afternoon but to no avail. I am told that the Data Protection Act forbids local authorities from using their lists of ratepayers for any other purpose than that for which the lists were compiled. They certainly were not compiled for what I have just described.

And another thing. The Government could be fairer about funding local councils. Northamptonshire has been a pilot area for speed cameras, which I naively thought were to promote road safety by slowing down fast drivers. I do not believe that any more. Their main purpose is to procure money for the Government. In 2000–01, 84,000 speeding tickets were issued in Northamptonshire, raising £6.5 million. All that goes straight to the Treasury. The local authority and the police are then kindly allowed—the Treasury is all heart—to claim back the cost of the cameras and the administration. They cannot just ask for a sum of money. They must prove on paper what they spent and the Government can argue against the claim. The local authority and the police get their costs back and the Government keep the rest.

In summary, revenue for the year 2000–01 was £6.5 million; costs were £2 million; and the Chancellor waltzed off with £4.5 million. Your Lordships may call that a windfall but I call it a stealth tax. If only the police could have had it. That would have been a real bonus for residents as some of our streets in Northampton are very dangerous at night. The money could have been spent on road repairs as a great many of our roads desperately need repair. Why cannot there be priorities in local government? Are all the really important services cut in order to provide unimportant ones?

Councils have enormous power and are paid pretty generously. I sometimes think that they operated better when the job was done for free. To serve their communities was its own reward and they were recompensed only when they lost money. Those days have gone for ever. It is no longer cool to serve out of love and duty. What a pity.

4.16 p.m.

Baroness Pitkeathley

My Lords, I can assure the noble Baroness, Lady Knight of Collingtree, that it is even more of a privilege to follow her than it would have been to follow the noble Lord, as she was billed in the list of speakers.

I, too, am grateful to the noble Lord, Lord Hanningfield, for giving us the opportunity to focus on this important topic today. In the brief time available, I shall focus not on the structures and powers of local authorities, and not even on their responsibilities, but on the way in which they discharge those responsibilities and the positive experiences that I have had in both the roles with which I have come most closely into contact with local authorities recently.

I am referring to my roles as interim chair of the General Social Care Council that was set up to regulate those who work in social care and as chair of the New Opportunities Fund, the largest of the good cause lottery distributors. The way in which responsibilities are discharged by local authorities is a far more important issue for citizens than the structure or even the balance of power.

With regard to the provision of social services, or social care services, as they are increasing called, local authorities come in for a great deal of stick. Some of that criticism is undoubtedly justified, as we can see only too clearly from the Climbie inquiry, led by the noble Lord, Lord Laming. However, we must not allow that justified criticism to get in the way of acknowledging the marvellous job that is done by most social services departments, or of understanding the problematic world in which they operate.

Social care services operate in areas of conflicting values and ethical dilemmas. Staff work with groups that are often marginalised, tackling difficulties that most of us would prefer not to admit even exist. They operate at the boundaries between public and private interests and individual and family interests. They try to strike a balance between autonomy and dependency and between choice and control. The work involves judgments about risk and priorities and the competing and conflicting interests in the most stressful of circumstances, when political and public opinion, especially in the press can be volatile, inconsistent and sometimes vicious.

I take this opportunity to praise local authority social services departments for the diligent and responsible way in which they carry out their onerous duties. Even in the face of tremendous pressure, many of them remain able to embrace new ideas and be innovative in their approach.

An example of that is their attempt to address issues such as increasing user participation and raising the standards of care. It is a feature of social care that many who use its services are disadvantaged and disempowered for reasons of youth, old age, ethnicity or illness. These are groups with few opportunities to have their say or to influence decisions. Yet local authorities are finding ways of helping them to do so, often through consultation processes which are not just about putting a notice in the local paper stating that there will be a public meeting but which spend time and money enabling those groups to be involved, to be listened to and to see services change as a result of their input. Work such as that totally contradicts the cynical view that people are not interested in local services or in participating in local government.

When the General Social Care Council published for consultation our codes of conduct and practice, more than 10,000 sessions took place on our website in three weeks. Helped by local authorities, we have organised consultation events for about 2,000 people and there is still a waiting list.

I also commend local authorities for their flexible and innovative approaches to partnership working, which other noble Lords have mentioned, and which is a fairly new activity for many of them which saw themselves formerly, as the noble Lord, Lord Harris, reminded us, as majority providers of all services. I have seen those partnerships working productively for the benefit of citizens through many of the programmes set up by the New Opportunities Fund. Our programmes are too numerous for me to give details of all those in which we have had excellent support from local authorities, but a few examples include setting up the People's Network via our public libraries which encourages more adults into learning by improving access to learning opportunities through the use of information and communications technology; training librarians and teachers in the use of new technology and providing out of hours childcare and out of school hours learning programmes for consortia of schools within local authority areas. We are also currently working with local authorities to develop bids to the fund for our £750 million programme for physical activity for schools and the wider community. Through those programmes I have been made aware that the process of engaging with local communities is alive and well.

In developing those and many other programmes and in delivering them we have been guided and assisted by individual local authorities, local strategic partnerships and by the Local Government Association. They are helpful, farsighted and totally committed to meeting the needs of their local population in spite of the problems which local authorities face, of which we have heard examples this afternoon and will no doubt hear more before the debate is ended. I believe that we can and should celebrate that commitment to partnership working and to innovation and resolve to encourage even more of that kind of working at national and local level across the public, private and voluntary sectors for the benefit of all our citizens.

4.22 p.m.

Baroness Scott of Needham Market

My Lords, I add my thanks to the noble Lord, Lord Hanningfield, for tabling the debate. Like him, I declare an interest as a member of a county council in the neighbouring county of Suffolk and also as a member of the Local Government Association transport executive.

I have served as an elected member in Suffolk for just over a decade. I enjoy that post very much and undertake the work as I believe passionately in government at local level. However, one great frustration has been to watch local government increasingly turn into a local administrator and a deliverer of nationally set priorities and policies. It is a matter of great disappointment to me that successive governments, regardless of what they say in opposition, have sought to reduce the power of local government by directly removing whole areas of responsibility to quangos or to the Secretary of State, by using the very real financial power that central government has simply to control the way local government goes about its work, or by using the legislative process to remove any real meaning of local choice. In that regard I think particularly of the best value regime and its hundreds of performance indicators.

I speak as a member of a council which has been in joint Labour/Liberal Democrat control since 1993. We were among the first councils in the country to adopt the new management structures, way ahead of the legislation in fact. We have achieved beacon status in a number of areas. We have glowing Ofsted and Audit Commission reports. Indeed, last year we received the council of the year award. I set out that stall not merely to brag but to demonstrate that my authority is prepared to innovate and to adopt new ways of working provided they are in the interests of the people we represent and not simply in the interests of some government agenda.

As I speak to colleagues about new legislation, over and over again I sense that they are concerned about increasing centralisation and about the powers that are removed from local authorities, local community health councils and local police authorities and carried to the Secretary of State. That may not make headlines in the papers but it represents a very real assault on local democracy which should worry us all. I wish to concentrate on one area where I consider that process is particularly dangerous; that is, the proposals contained within the Green Paper on reform of the planning system. So far we have not had a full debate on that subject in this House and therefore I make no apologies for raising it now.

The Green Paper makes a case for reform of the planning system with which I believe few of us would disagree. However, it draws some conclusions to which I take profound exception. We on these Benches agree completely that there ought to be a regional dimension to the planning system, but until there is a democratically elected tier of regional government the proposed removal of county councils from the planning system could have disastrous effects. Currently, there is almost no national dimension to the planning system. As we have seen in recent debates on housing numbers and major infrastructure problems such as Terminal 5, local public inquiries end up debating major issues of national and sometimes international interest alongside, for example, local access issues concerning where buses should run. It is no wonder that they take months and, indeed, years. My noble friend Lord Bradshaw will say more about that aspect, but the removal of the only democratically elected tier large enough to deal with strategic issues will not help the situation.

The Green Paper proposal that Parliament will in future decide on all major infrastructure projects is inadequate in every way. How many times have we spoken in this Chamber of legislation which has come to us from another place inadequately scrutinised and debated? Are we really to believe that our honourable friends in another place will have the capacity to carry out the kind of work that is required to decide on a Terminal 5 or a Sizewell C? I think not.

As we have heard from my noble friend Lord Greaves, local councillors are now prevented by legislation, and the interpretation of it, from making decisions on the most simple matters, even garage extensions. Yet it is proposed that colleagues in another place can use the huge government majority to dragoon through major infrastructure projects. There is much national guidance on the minutiae of planning but no overall planning policy framework in major areas such as aviation, land use, housing or, indeed, nuclear energy. Under the proposals in the Green Paper, we shall end up with no effective national planning system, an embryonic and undemocratic regional planning system, and then the district councils.

As a former district councillor, I can tell noble Lords that the planning skills required for district council officers are largely regulatory and related to development control. It is within the shire counties that the strategic planning skills lie. Under the proposed reform, those planners will have no incentive to move to smaller district councils. They will retire early at great cost, take up other employment within county councils, or, more likely, join the army of consultants charging councils four times what it used to cost to employ them.

The transfer of planning powers from 35 English counties to 238 district councils will cause serious skills shortages in a profession which the Green Paper admits is already overstretched. The Green Paper proposes business zones in which planning controls will be removed altogether to make life easier for developers. Local authorities have a much wider agenda than that which relates to business. Of course, they must be mindful of business, but there may be times when local environmental or social sustainability is more important than simply providing a business or a developer's charter. We simply cannot let that go.

In terms of performance, there is no evidence to suggest that it is the county level of government which is causing the hold-ups. Rather, it is district councils which are having difficulty undertaking their planning functions due to skills shortages. At county level, structure planning is a slow and laborious process but that is because of the statutory processes that have to be gone through and is not the fault of dilatory planning officers and members.

County councils, along with others, accept the need for change. They have come up with some proposals for change. I urge Ministers to give serious consideration to the points made by the County Councils Network, the LGA and various other bodies before they carry out this assault on a planning system which has served us well for 50 years.

4.30 p.m.

Baroness Byford

My Lords, as many noble Lords know, I come from a rural background with farming interests and family and relatives who have served, as many still do, in local government in Leicestershire at parish, district and county levels.

My motivation for speaking in today's debate is my growing concern, not to say alarm, at what appears to be happening at all levels of local government. In the few minutes allocated to me, I shall outline my concerns under four main headings: first, consultation; secondly, codes of practice; thirdly, the proliferation of pamphlets and regulation; and fourthly, funding, including the additional responsibilities being placed on county councils without the relevant funding, resulting in increases in council tax at both district and county level. I accept the concerns expressed by my noble friend Lord Hanningfield about the future of local government, and I thank him for giving us the opportunity to debate them today.

I have decided to highlight two such concerns, and in that respect I follow the noble Lord, Lord Greaves. Codes are proliferating. There are codes to control the relationships between inanimate bodies—for example, the code of practice governing local education authorities in school relations. There are codes relating to inclusion and all forms of political correctness, and codes arising from the pronouncements of the Committee on Standards in Public Life, the most recent of which is causing real anguish at local, parish level.

I have not made a study of all the codes available. However, I am aware of their growing irrelevance to the job in hand that they have to do, whatever it may be. For example, school governors control school budgets but they have very little ability to spend hard cash. In most schools, teaching and support staff salaries account for 80 to 85 per cent of the budget. Other items, such as business rates, heat, light and power, are not open to manipulation, and, in practice, many governors find themselves in control of maintenance but very little else. Governors are supposed to conform to a code of financial declaration as stringent as that applied to county councillors. Yet in areas where patronage and deceit could cause problems they are not covered at all. In that respect, I refer to exclusion panels, staff recruitment, and even discipline and grievance procedures, in which a failure to declare a relationship—that is, my sister's best friend's son—could result in unfairness, not to mention injustice.

I am interested to discover that school organisation committee members shall, act in accordance with the seven principles of public life", but are only bound to declare an interest in any proposals affecting a school of which they are governors, which any child of theirs attends or in respect of which they may have a pecuniary interest. Contrast that with the new code for local councils, which requires a member to declare a personal interest in any matter that may or may not have more than an average effect on the well-being or the financial position of himself, his spouse, his partner, his parents, his parents-in-law, and so on. If it were not so serious, it would be hugely entertaining.

However, at village level, I can foresee many decisions having to be shelved because all the councillors may have to declare an interest. What is even more frightening is that the clause binds each councillor to report, in writing, any member of the council whom he reasonably believes has failed to comply with the authority's code of conduct. The code that defines "a relative" in such all-enveloping detail does not define "reasonable". I request the Minister to do so before the end of this debate, in terms that will perhaps stand up in court; the Minister is well qualified to do that.

Clause 15 of the parish council code requires written notification within 28 days of the receipt of any gift or hospitality over £25. That is strange. In this House we are limited by the same code to a maximum of £1,000, which could reasonably be regarded as an incentive to support a cause. Twenty-five pounds could provide supper and a good bottle of wine for two persons and, therefore, fall within that range. I urge the Minister to look at that particular section of the code.

I turn to the matter of funding—the other axe that I have to grind. Funding is an issue to be considered in all areas of local authority spending. Will the Minister tell us when the review, promised for so long, to make funding easier and fairer will be made public?

I now turn directly to my local county of Leicestershire, and I declare an interest—my brother is a county councillor. Leicestershire follows the national trend in regard to pressures on its budget. Two main areas are under-funded by the Government: social services and the environment, and protective and cultural services.

I deal first with social services. Leicestershire has an above-average number of young persons who qualify for preserved rights because they live at Care Shangton, which is under community care and funding for which, prior to 1993, was provided by the DHSS. A change was made which meant that social services would pay the resources that were not transferred. The under-funding shortfall for the year 2002–03 is £679,000. In respect of residential allowances, there is a shortfall in funding for the independent sector for 2002–03 of £548,000. The reduction in residential care income for the 12-week property disregard is £350,000 for the same year. The reduction in residential care income—change to capital limits—is £275,000. There are many others.

In addition, Leicestershire has topped the SSA for environmental, protective and cultural services by £17.2 million, but, following the EU legislation on the disposal of fridges, the cost is now £300,000 for 2002–03. The landfill tax is estimated at £325,000; the increase in waste tonnage (landfill) is £150,000; the increase in waste tonnage (haulage) is £110,000; and there are others. The total cost of growth of waste disposal comes to the huge figure of £1,055 million. The SSA for this service was £25.2 million, increased for 2002–03 to £1.16 million. There is a huge deficit in relation to which the county councils will need some help. Are they to disregard some of their services, such as libraries, in order to cope with additional legislation and additional responsibilities for which they have not been funded?

4.38 p.m.

Lord King of West Bromwich

My Lords, when I was first elected to my local authority in 1979, our local MP was Peter Archer, now the noble and learned Lord, Lord Archer of Sandwell. He said to me, "If you manage to achieve five per cent of what you set out to achieve, you will be doing very well". That casual remark clearly demonstrated a need to look at the way councils were run. I therefore believe that the Government's directive to ask local authorities to review the way they carried out their affairs was overdue.

Councils around the country were urged to revitalise themselves, respond to local people's needs and deliver top-class services. At the heart of that modernisation campaign was the shake-up of the traditional committee system, which had remained largely unchanged since the 19th century and which did not adequately reflect a modern, complex society.

As noble Lords will be aware, three basic models were put forward by the Government. It was left to the local authority, in consultation with its communities, to choose one of those three models. The new style was to have an executive that was clearly responsible for taking decisions. Those executives would be held to account by overview and scrutiny systems, which would monitor their actions. The revised system aimed to clarify who was responsible for taking a decision and hold them accountable rather than allow the matter to become lost in a committee.

I am pleased to say that my own authority, Sandwell, has stayed ahead of the game. It launched its drive to modernise the council two years ahead of the deadline by piloting one of the three ways of managing town hall business. That enabled it to be one of the first authorities in the country to submit and have approved its formal political constitution. Sandwell has been formally operating the new "cabinet and leader" model of government since September 2001, following two years of piloting. The council adopted that model not because it was told to but because it was felt to be the most suitable system for a borough such as Sandwell, which is composed of a series of tight communities that are focused around six towns. That view was backed by the community through extensive consultation, which took place throughout the pilot period.

One of the cornerstones of that consultation process were the six town committees that were established in each town in the borough where the proposals were debated. Although overall it has proved difficult to create much enthusiasm for the changes, the local committees have proved to be very popular with local people and are now a central part of the way in which the council runs itself.

I am pleased to say that I was the council leader at the time of the council meeting. Extracts from my speech at that meeting were reproduced in the local newspaper. I spoke about the advantages of the new system as we saw them. I said: New ways of running the Council are important to everybody in the Borough and will affect all members of the public … We have listened to the people by carrying out extensive consultation, and now we are able to forge ahead with the Leader and Cabinet system we have been piloting for sometime … We are in a perfect position to press ahead and get on with the job of ensuring that the new system delivers the goods for all local people … Our aim remains to give them a Council which listens to their views and aspirations and then responds flexibly and efficiently". I also said: Modernisation is essential to that aim and the delivery of Sandwell's Community Plan". For those noble Lords who do not know Sandwell, I explained that the plan was, developed by the Borough's Civic Partnership of key public, private and voluntary sector agencies", and that it is, centred upon the vision that Sandwell by the year 2020 will be a thriving, sustainable, optimistic arid forward looking community … The Council has re-organised itself internally to ensure the delivery of services based upon that vision. Now the Council's modernised political management system will play its part in making the vision a reality". Sandwell has always put great emphasis on partnership working to deliver its local agenda. We welcome the new power of well being to bring about the economic, environmental and social improvements that are so needed in a deprived area such as ours. We also welcome the proposals in the recent White Paper to rationalise the number of plans and strategies that local authorities have to produce. The Sandwell community plan that I mentioned is a good example of the way in which one all-embracing partnership strategy can replace the many plans and strategies that a range of local agencies are required to produce by central government.

Obviously, the plan needs more attention and more needs to be done to rationalise the various regimes that impact on local government and its partners. The Government should set the overall framework within which local authorities and partners deliver local solutions to local needs. We must continue to move away from the "one size fits all" mentality and recognise that needs are best interpreted locally and met at the local level in a partnership setting that reflects the local community.

Local authorities are best placed to interpret those community needs but they require freedoms, flexibilities and, most importantly, adequate resources from central government so that they can deliver the improved public services that we all want.

4.46 p.m.

Baroness Carnegy of Lour

My Lords, several noble Lords have spoken of the need to invigorate local government. I want to discuss that in a particular context—the need to strengthen local government's historic role as a vital ingredient in the glue that holds our country together.

We are all seriously worried about the growing stresses and strains on our so-called social cohesion. Part of that anxiety involves cynicism about and lack of interest in our democratic institutions and the low turnouts at general elections in particular. As we wonder what should be done, it is important to remember that nowadays, although people gain their impressions of our democratic process from television and the newspapers, their day-to-day experience, their contact with real people and their experience of how the system can help or hinder them comes mainly from local government. Few people have met their Member of Parliament, more have met their councillor and many—very many—have met local government officials.

Despite the changes over the years to local government, the services and functions that it provides are still those that are nearest to people's day-to-day lives. Those services and functions are recognised and experienced locally as local government's concern. Councillors and local government officers, many of whom are among the most dedicated and hardworking of our public servants, are of necessity in close touch with local people—their needs and opinions. Because of their nearness to the electorate geographically and in terms of what they do, local government people play a large part in helping their customers to discover the basic workings of the system and the part that they can play.

Most people are regularly involved in some way with their local council. What they find frequently affects how they vote. In my experience, that affects how they vote not simply in local elections but also in general elections, and whether they vote at all.

How much more could be done if the scope of local government could be widened again in new ways, so that more local people could have greater contact with the system and so that the interest of the role would attract a wider variety of able councillors and officers? I do not believe that that would be easy. We cannot turn back the clock. Technology and social science will go on developing and will make it increasingly easy to run services from the centre, to regulate, monitor and manage from the centre and to communicate directly with each elector from the centre over the heads of local government. The devolved assemblies will do that even more than central government. Those are the signs in Scotland. We cannot turn back the clock, yet the signs are that the effect of this centralization—this vicarious, media-depicted experience of our system is a principal element in public cynicism. Surely it would be wise now for this Government, or a successor government, deliberately to seek new involvements for local government. I have in mind involvements as challenging and as interesting as they can be, so that they attract increasing numbers of able men and women, more younger men and women, to do the job; and so that they offer the maximum possible number of opportunities for local people to experience their system and play a part in it.

As I said, I do not believe that it will be easy, but it should be deliberately done. The Government should set out to do it and local councils should set out to think of ways of doing it. Some years ago, Schumacher's message was "Small is beautiful"—that local satisfaction is the way to wider satisfaction, part of the glue that holds the country together. In modern government, we forget that at our peril.

4.51 p.m.

Lord Shutt of Greetland

My Lords, I, too, thank the noble Lord, Lord Hanningfield, for inaugurating this debate into, local government, its structures, powers and responsibilities". I should like to make the declaration that I have been a councillor for 24 of the past 29 years and am still a serving member of Calderdale Metropolitan Borough Council. Much could be said on this subject, and I shall be speaking from personal experience.

Perhaps I may begin with structures—the cabinet system. It starts for real in May. All that has been taking place until now has been a matter of practising at running the cabinet system. My view is that the jury is still out, and will be for a long time, on whether or not this will be a better system. It is perhaps wonderful that we have got rid of all those meetings, many of which did not really achieve anything in the end. Indeed, there may have been far too many meetings, with an element of a "talking shop" in the process.

Like many noble Lords in this Chamber, I have knocked on doors—not necessarily for the vote, but actually to suggest to whoever opened the door that he or she would make a very suitable local government candidate and councillor—sometimes with, but often without, success. When people ask, "What does it involve?", you reply that there is a full council every so often and that he or she may be on this, or that, committee. You make that response while biting your tongue; you know that if they are not careful, they could find themselves in the town hall every night of the week.

I believe that under the new system we can be honest with some of those people, especially if they are not to be members of the cabinet. I suspect that they will not be on the first occasion they are elected. However, so far, there is some evidence to suggest that the non-cabinet members believe that they play a diminished role in local authorities. I wonder about the tight group of decision-makers in the cabinet. It does not seem to me that there is any transition for those who are scrutineers and who, perhaps next year or the year after, will be required to serve on a cabinet.

In Calderdale, where we were formerly also part of West Yorkshire County Council, we now have some joint bodies that the various authorities thought it worth while to keep going. Because they are decision-making bodies, only members of the cabinet can serve on those joint bodies, which is really taking things too far. That, in itself, would have been at least one area of training for people who might subsequently serve on a cabinet.

I turn to powers. In order to exercise powers you need resources. I recall being involved in a debate earlier this year, or perhaps late last year, when the noble and learned Lord, Lord Falconer of Thoroton, agreed with me that the revenue support grant settlement was the major determinant for local government in coming to a view on setting the level of council tax. I believe that that is right, but it is only part of the process. The other elements that are highly significant in determining what a council tax should be are the various special offers. Officers must be hired in order to look for special offers. However, those special offers are not the ones to be found in supermarkets; it is not like going to Morrison's, Asda, or Sainsbury's. We have the standards funds for education, and, in our part of the world, we have the neighbourhood renewal scheme, for which £900 million has been designated over three years.

Every council that fringes around Calderdale—Bradford, Kirklees, Oldham, Rochdale, Burnley and Pendle—all receive neighbourhood renewal support, but not Calderdale. Indeed, 31 out of 36 metropolitan councils receive such support. Even Kensington and Chelsea and Westminster receive it; but not Calderdale. I should like to know how you get an invitation to receive these special offers. In my view, the powers of local government are far greater and far more important than what local government seems to be doing at present; namely, creating a multitude of plans and strategies.

I turn, finally, to responsibilities. However one considers this, I believe that the major responsibility of local government is to make the community— that area, that place—a splendid place in which to live. But we should look at some of the recent features that have perhaps set authorities against that course of action. We have this concept called "best value". What does it mean? I think it means striving for the best standards and that everyone must be in the top quartile. I find that difficult to understand.

In my part of the world, we are having a best value review of museums and galleries. We have a splendid place in Calderdale called Shibden Hall. It is an accident of history as to whether Shibden Hall might have been an asset of English Heritage or one of the National Trust, but it is not: it is an asset of Calderdale council. Therefore, when we consider whether Calderdale is over or under "museumed", we must take such matters into consideration. Local authorities study national statistics to see whether they are over or under "museumed". I wonder whether the City of York will be having a best value review on heritage, and whether it will turn out to be under or over "heritaged". I believe that I know the answer.

I was involved last week in a rate fixing debate, the most depressing aspect of which is the area of discretion. It seems to me that discretion is used only to cut. The more tightened the revenue support grant settlement and the special offers become, because of the real concern that statutory services must be covered the more local authorities use their discretion to cut resources for parks, gardens, leisure centres, museums, the environment, the countryside, and grants to voluntary bodies. Every shift that takes place from national to local taxation means an attack on the discretionary activity of local government.

5 p.m.

Lord Dixon-Smith

My Lords, it is a particular pleasure to speak in this debate initiated by my noble friend Lord Hanningfield. He and I served together for many years in County Hall, Essex. I sometimes regret saying, and I am sometimes relieved to say, that it is now so long since I departed that place that I have no interest to declare. It is almost a relief to find myself discussing local government once again after the intense pressure of dealing with a Bill from the Secretary of State at the Home Office, which is devising ever more detailed and intimate ways of intervening in a locally-provided service; the police. I recommend that noble Lords skim through that Bill to see what the future might be.

I had the privilege of serving on the Front Bench during the passage of the Local Government Act. My worst fears have been borne out. It has done nothing to increase the freedom and independence of local government. Now I find that local government has to agree with national government 46 separate plans of its affairs. They are judged against 145 specific performance indicators. There are four separate inspection regimes, about which we have heard, now costing £600 million per annum. The best-value system, introduced by the Local Government Act 2000, is inevitably applied in detail to particular services. That has led Public Finance magazine, which is a remarkably useful source of information, to comment: These reports are a waste of public money. Our calculations show £157,000 on audit fees alone for two unusable reports". I can imagine that being replicated backwards and forwards across the country. At the same time we have seen ring-fenced grants in the annual revenue support grant settlement increase from 5 per cent in 1997 to 12 per cent this year. Is that greater independence for local government?

Now, in the forthcoming White Paper, we see the Government threaten direct intervention in authorities perceived to be under-performing. On whose judgment is that? There are possibilities of transfer of functions away from councils; and of a council being put into administration or even being run by another council. All of that led the Local Government Association—I am glad that that is still a strong power to represent local government well—to comment: Formal intervention should be avoided wherever possible as there will only be sustained improvement where an authority accepts the need and owns the problem and its solution. That is unlikely where a solution is externally imposed". It is unsurprising, therefore, that in considering the White Paper, Public Finance magazine published an article by Tony Travers, the director of the Greater London group at the London School of Economics, which states: The overall tone of the white paper is pro-local government. But its proposals are sufficiently modest to suggest the government can only just bring itself to move in this particular direction. It looks as if a genuine desire to reverse the tide of centralisation has run up against other demands to ensure that, say, it is possible for Whitehall to intervene directly in poorly performing authorities. The government has two personalities: one is Stalinist and interventionist, while the other understands that the Soviet Union's 'democratic centralism' did not work". Later in the same article, there is a comment that: The centre cannot break its addiction to control". That may be a common government failing, but it is certainly one which I intend to continue to resist.

I turn to the Government's proposals for the planning system. I have to confess a marginal sympathy with their proposals for major infrastructure projects. However, when we get below that specific issue—the noble Baroness, Lady Scott of Needham Market, did a precise and expert demolition job on the proposals to remove county councils from the planning process—there is an additional aspect to be considered. In the old days I used to have some dealings with Europe. When we were dealing with nascent regionalism, it always struck me that the reason Brussels was so enamoured of the regional question was because it found it almost impossible to deal with national governments. It wanted to have regions as a means of getting into matters more locally. National governments were an obstacle to Brussels expanding its view. That is not an anti-European view, it is a straightforward observation. On the whole, I favour Europe.

We need to think seriously about the proposals for regionalism. If they also involve, as they appear to do, proposals to remove counties from the scene, we are into yet another round of structural reform of local government. That process has been going on in this country ever since I was involved in local government. It has been a huge waste of intellectual effort and a huge distraction from the proper provision of services to the public, which the public have a right to expect.

5.7 p.m.

Lord Bradshaw

My Lords, I begin by declaring an interest as a member of Oxfordshire County Council. I thank the noble Lord, Lord Hanningfield, for initiating the debate. I shall concentrate on planning aspects and start by asking what is wrong with the present planning system. There are some delays. Although many of those are due to the queues for public inquiries experienced at present by many local authorities, much could be done with the few other cases by government intervening directly with the local authorities concerned.

I believe that the main frustration of business lies in the big schemes, whether airport terminals; runways; large waste incinerators; big roads or nuclear power stations. We want to know how such decisions will be taken in future. Will they concentrate on whether we need the facility and what will be its particular location? If specific location decisions are avoided—for example, by deciding that we need a runway somewhere in the South East—that would still leave the issue of location to be fought out through the existing planning process. Conversely, how will Parliament make the decision without the implicit or explicit involvement of the party Whips, to which the noble Baroness, Lady Scott, alluded?

The Heathrow terminal 5 inquiry took a total of six years to conclude at a total estimated cost of £80 million. That is neither democratic nor does it involve communities. The reason for that is that planning inquiries—I am sorry to say this in the absence of the noble and learned Lord, Lord Falconer—have become a meal ticket for the planning bar. If we want radical reform of the planning system why not change it for one where the inspector conducting the inquiry does so on an inquisitorial basis? He is qualified so to do and he could ask the relevant questions without them being drawn from witnesses under cross-examination. That reform would speed the process and cheapen considerably planning at all levels.

There is a shortage both of planning staff and those going to planning colleges and universities to qualify as such. Past experience shows that any radical shake up of local government causes many experienced people to leave. Obviously, those people do not move into the new posts that are created.

The re-organisation of local government in the 1990s cost double what was forecast. Any change that the Government postulate will be very expensive. Does the Minister know what the cost will be? Does a figure of £40 million attached to the Green Paper as a one-off cost and an amount in the region of £80 million annually thereafter seem excessive, as all the staff in post will have to be paid?

Of course, the whole procedure may be postulated on regional government. We hope to see that, but as a means of devolving power. Of course that would settle the power on elected regional assemblies. However, we have strong fears that we shall end up with appointed assemblies and that the real decisions about land use and sensitive issues such as housing numbers will be taken not through those assemblies but by central government through their regional offices.

The Minister claims business support for the Green Paper. Can he say from where he gets his evidence? Is business really complaining about the uncertainties of the public inquiry system rather than the planning system itself?

Another issue concerns compensation for planning blight and compulsory purchase. More generous and less bureaucratic systems abroad make people less resistant to planned changes. Do the Government have any proposals for that?

One of the strengths of the current planning procedure is the integration of land use, transport, minerals and the growing problem of waste disposal. Counties with their small staff understand how those link together and how policies relating to housing and industrial development link into them. The local transport plans have been successfully launched. We involve the district councils and the process allows for the involvement of town and parish councils, both in the structure plan and in the local development control process. Because of the historic pattern of governance, decisions—even extremely unpopular ones such as those on housing numbers and minerals extraction—are accepted with the counties in place and their district and parish councils underneath them. The misery is shared. But if these decisions are removed to a superior tier of government there will be, at best, a sullen distrust of anything which emanates from it. That will be because the decisions will be taken more remotely from the people who are most involved.

We think that regional planning guidance could be re-written and simplified in the process. But I urge the Minister to think carefully about the cost of the upheaval proposed and the probability that there are insufficient trained staff to do as he proposes; the democratic deficit which we face from appointed regional assemblies; and the threat posed to integrated planning in the counties which still exist.

I have proposed an alternative reform of the planning system and have asked questions about how major decisions are to be taken in the future.

5.14 p.m.

Lord Clarke of Hampstead

My Lords, I join other noble Lords in thanking the noble Lord, Lord Hanningfield, for providing the House with the opportunity to consider the structures, powers and responsibilities of local authorities. I find myself in agreement with much of his opening speech to the House. I am delighted that he raised so many issues that are of concern to people who work in and serve local authorities.

My noble friend the Minister will be aware that I had the privilege of heading up the task force which examined the causes of the serious disturbances in Burnley last June. One of the paramount responsibilities of Burnley's local authority will be to implement the recommendations of that task force. I want to touch on one or two of the practical matters that they will be faced with.

The concept of a task force to look into the problems of Burnley came as a result of a borough-wide conference—an initiative of the people of Burnley. It was organised in a matter of days by a very efficient Burnley Borough Council. That conference expressed deep concern at what had happened in the town and asked the task force, as part of its remit, to make recommendations in an attempt to avoid a recurrence of what had shaken the people of Burnley.

The task force report was published before Christmas. It contains over 80 recommendations. It represents a good deal of hard work by a number of people, all of whom, including myself, were volunteers. The recommendations cover a range of issues.

I am aware that the Government are actively considering the findings of the task force so I shall not dwell on that part. The recommendations impact on the local authority and the powers that it has to implement some of what is needed to be done in order to avoid a recurrence of the disturbances.

In the limited time available today I should like to ask my noble friend a number of questions and ask whether he will give consideration to some of the recommendations that fall within the terms of this debate? First, Burnley is unique among the areas that experienced civil disturbances. As the House will know, a number of areas in the North West and the North of England suffered disturbances. However, it was unique inasmuch as it is a borough council and a county council. Sometimes it is very difficult to find the dividing line. It is a dual, two-tier authority rather than a single unitary or metropolitan authority.

It was felt by the task force that that situation caused some difficulties in understanding, especially by the people of Burnley. We were able to make direct contact with over 9,000 of Burnley's 90,000 residents with our consultation procedures. That. I believe, should act as a model for the future. However, the task force considered that a unitary authority would be worth considering as part of the consultation on the forthcoming White Paper on regional government. The reason I say that is because Burnley is unique in its authority position but not in the problems that it faces. It has all the inner city problems without the inner city status. Therefore, it suffers as a result of available finances.

Secondly, I should like to make a plea that local authorities such as Burnley be given more flexibility over the spending of moneys received from the Government.

I should say as a matter of apology that, although I was in the Chamber for the first hour and ten minutes of the debate, I then had to leave. As a little treat, the young people on the Burnley task force came here for tea. I could not leave them abandoned in the tea room. I apologise to noble Lords who made speeches in my absence, but tomorrow I shall read every word they said.

I believe that the concept of local strategic partnerships should be given a greater say. I heard both the noble Lords, Lord Harris and Lord Woolmer, talk about the need for local people to have direct involvement in the decisions and in what is clone in those areas. The Government should look at ways of giving them a greater say. I shall explain the matter as briefly as I can. One of the problems that led to the serious disturbances—the terrible violence —was the misunderstanding of how local government money was being allocated to areas. Under the present system, allowances are given for regeneration and earmarked with specific guidelines and criteria.

If the council had had a little more flexibility, it could have made the matter easier to understand. It would have been able to say, "We will do something in this as well as the other area". But it could not do that. Therefore, it led to a great many misunderstandings and, in some cases, to some dreadful propaganda from what I would describe as "neo-fascist organisations". In those circumstances, the restrictions that were placed on the local government were a barrier to making progress in race and community relations.

I ask my noble friend to consider the position of local authorities which, like Burnley, have less income today than they had 10 years ago. That may seem a little unusual. But in 1992–93 Burnley had £11.5 million. That has decreased by 2 per cent this year. Inflation increased by 26 per cent over the period and council spending increased by 16 per cent, but the council standard spending assessment has decreased by 2 per cent. Unless the Government reconsider how money is allocated to places such as Burnley, we face a losing battle.

I turn to the housing surplus. At present, the local authority cannot do much about regeneration because of the enormous cost to it of clearing each derelict, abandoned, neglected property. The figure cited in Burnley is £16,000. Burnley cannot afford that on its own. One recommendation in the task force report that I ask my noble friend carefully to consider is that a co-ordinated approach is needed between the regional development agency, the Housing Corporation and the local authority to tackle the problem not just in towns such as Burnley but across the area where problems are common.

I should like to illustrate how people are trapped in derelict property. Some cannot move because they took out mortgages 15 years ago at £9,000 to buy a house. The compensation to get them out of their appalling state does not give them a chance to go anywhere else. Most of them are of the age at which they had to have an endowment mortgage. But they end up with no equity and so are trapped in those properties.

In all seriousness, I ask my noble friend the Minister to address some of those problems. I know that the Government are considering them—I have received a good response from the Home Secretary downwards—but I hope that they will be considered in the continuing discussions.

5.21 p.m.

Baroness Hamwee

My Lords, I too should like to thank the noble Lord, Lord Hanningfield. He talked about the Conservatives' support of the local and the noble Lord, Lord Bowness, commented that freeing local government is the prerogative of opposition. I must say that those two noble Lords are among an honourable band who have always supported the local under every government.

I should declare an interest as a member of the London assembly—a part of the Greater London Authority—which will be affected by some of the White Paper proposals if enacted. At present, I chair the assembly and we have been experiencing the delights of the executive/scrutiny split, to which I shall return in a moment.

For me, the first issue is not structure but functions and powers—form before function, of course—and so I welcome the new shoots of freedom, as the noble Lord, Lord Harris of Haringey, referred to them, that pop up in odd places in the White Paper. But I still believe that its approach is too centralised. It suggests rewards for those local authorities that are doing well. But doing well by whose judgment: that of Her Majesty's Government; that of the Audit Commission, keeping its scorecard—we are all aware of the temptation to measure numbers and speed rather than quality—or that of local voters?

A couple of months ago, when the Minister repeated the Statement introducing the White Paper, he said: We will also intervene decisively where councils are failing their local people".—[Official Report, 11/12/01; col. 1257.] But is it up to the Government to assess that? Is it not a matter for voters? What has happened to the proposals for annual elections, about which we heard a good deal a little while ago? Local authorities should be answerable first and foremost to local people and have autonomy by right, not as a reward from central government. They should have the freedom to innovate and to make mistakes. Arguably, that freedom is more necessary for local authorities that are struggling to cope with difficult local circumstances than for those that are high performers.

Greater freedom for high performers could lead to a difficult, vicious circle—a virtuous circle for the few, of course, but vicious because of the need to attract able people as councillors, to which many noble Lords have referred. I think that the noble Baroness, Lady Knight, said that it was no longer "cool" to serve from a sense of duty. I am not sure whether any of your Lordships feel that they are of an age to be cool, but it is perfectly clear that there is huge recent and current experience of local government in this House—not just experience but, as my noble friend Lady Scott described it, a passionate belief in local democracy, as distinct from local administration. That point was also powerfully made by the noble Baroness, Lady Carnegy.

As the noble Lord, Lord Woolmer, put it, poor performers are threatened with having a mayor—one model of the executive/scrutiny split—imposed on them. It is that split, especially the executive mayor model,that in itself is deterring potential councillors. It means that no career path is obviously open to them. Whether or not it is cool, there is certainly a sense that some councillors count and some are second class. The noble Lord. Lord King, supported the executive/scrutiny split, but it was notable that what he described and supported was the Cabinet model, to which different arguments apply.

We must attract passion back into local government among a younger generation. There was a resonance around the Chamber when my noble friend Lord Shutt described knocking on a door to say, "Have you thought of being a local councillor? You just have to go to a few meetings". I remember being told in 1978 that I would have to attend two meetings every six weeks. Frankly, that was a fib. Four years later, when I recruited someone else, I handed over my diary to let her see the honest truth.

I am desperately anxious that in imposing new models of form we are losing sight of the substance and deterring those who have so much to contribute. I am anxious about deterring not just politicians but professionals. Reference has been made to inspections. In many cases, officers are professional people. I wonder how much disaffection there is now among professional officers who feel threatened rather than supported by some inspection regimes.

I turn to finance. There is a good deal that we welcome in the White Paper—in particular, the proposed new capital regime. I was interested to read in the description of how that would function a reference to consultation. I am glad of that. Consultation is hugely important and I was interested to hear what the noble Lord, Lord Clarke, said about not just consultation but participation, because consultation is not enough. It is not enough to ask views without, ideally, seeking participation and, at least, providing careful feedback.

The London assembly is currently considering that matter. We are concerned to ensure that the mayor consults Londoners in the most effective way. Several voluntary organisations strongly pointed out to us the huge risk, if there is inadequate feedback, of jeopardising the great fund of goodwill available when a new government is formed with widespread support— let us leave aside questions of turnout in the referendum, and so on—for a regional government, which has been badly missed. We must perform well. I must say that on that matter I am critical of the mayor—whom I support in many ways on many matters. He publicly expresses scepticism about consultation, which, I think, he feels is an activity too far. He says: I get on the Tube every morning and people will occasionally stop and tell me what they think. My tracking polls show I'm slightly more popular than I was when I was elected but I know when the public mood is up or down…because I find it on the streets…Before anyone invented opinion polls, politicians managed quite well in Victorian England because they had a gut feel for what the people felt". That is not enough. As politicians, we must all be open and accessible, invite opinions and take them on board.

To return to the issue of finance, I must say that there is a long way to go before the local government financial system is adequately transparent. My own borough, Richmond-upon-Thames, for instance, which is similar to the neighbouring borough, Kingston, receives far less in central government grant than its neighbour. Trying to explain that to council tax payers, who forget, of course, that they are also income tax payers and VAT payers, is immensely difficult, without talking about gearing, ring-fencing or special offers.

As there has been some comment on regional government, I shall end with reference to a comment that was made to me yesterday by a senior figure in public life. He expressed the view that regional government—in London, at any rate—was like a black hole. He did not mean a black hole in the sense that things go into it and never reappear, but in the sense that its existence has pointed up the regional issues that require democratic involvement.

It is interesting that there has been little reference in the debate to turnout. That is a good thing, and it indicates how conscious we all are that the issue is not the mechanics of voting. The issue is good government and how we make people feel that they have a stake in it.

5.32 p.m.

Baroness Hanham

My Lords, it would be fair to say that the debate has generated a fairly wide-ranging discussion that has underlined the importance of local government. As my noble friend Lady Carnegy of Lour and the noble Baroness, Lady Pitkeathley, said, it is the tier of government that is closest to the electorate and affects their lives most immediately. It is certainly the one that those of us who are involved— I declare my interest as a member of a London borough council—believe to be the most effective, when there is not too much regulation or centralisation. The Minister holds the ring today, but I am not sure that there was much comfort for the Government in what was said this afternoon.

My noble friend Lord Hanningfield, who, if I may say so, made a powerful and important speech, drew particular attention to the planning Green Paper. Many other noble Lords referred to it as well. In particular, my noble friend spoke about the exclusion of county councils from a role in the structure plans. Not surprisingly, there is enormous concern about that, as expressed so adequately by the noble Baroness, Lady Scott of Needham Market. There is also concern about the intention to reserve decisions on larger developments to Parliament and the pressure to increase the amount of delegation of planning decisions to officers.

There seems to be a misunderstanding about the value of ensuring a hearing by democratically elected councillors who know and understand their area, as well as the need to turn round planning applications within a given timescale. I shall comment briefly on the latter. In some instances—possibly many—applications are significantly improved by the intervention, at an early stage, of planning officers, advising on aspects relating to a council's unitary development plan, previously set precedents and design issues, which may mean that the application does not go out to consultation within the normal timescales and is not determined within the constrained period. That is particularly important if there are conservation issues involved. However, the result is, often, a much better proposal that is more likely to receive unreserved approval when considered. So, nothing has been lost because the time taken was over the target.

Much attention has been paid to the structures of local government. They should not be the plaything of the Government. The future of the county council is just one of the matters that have been allowed to surface as a result of the Government's push towards regional government. As my noble friend rightly commented, we do not need regions: we have counties. The current proposals, which would encompass the planning regions—that is what they are—would make a tier of government that would be incoherent in any terms, wield power over enormous numbers of electors and be out of touch with nearly all of them. My noble friend Lord Waddington spoke knowledgeably about that. I do not want to emulate him or repeat what he said, but I thought that his speech was forceful.

I am also reminded that, in response to a recent Question asked in the House, the noble and learned Lord, Lord Falconer of Thoroton, said that, if there were to be regional government, there would be one tier of government too many and one would have to go. The assumption must be that that means the county councils.

It is interesting that the White Paper on regional government, which was expected in March, has suddenly vanished from the screen. That raises suspicions that a diktat from No.10 that there should not be three tiers of government has affected the way in which the proposals were to be couched: so "Out with the counties!".Would it also mean, "Out with the districts"? That would be no small, insignificant little rearrangement of tiers of government. As my noble friend Lord Dixon-Smith suggested, it would be another sizeable, disruptive and expensive proposal, which would take years to sort out. The expense is exemplified by the reorganisation of Humberside in 1999. That reorganisation alone cost—at 1999 figures—£53 million. If that is used as a benchmark, it would indicate that if such reorganisation were carried out on a wholesale basis, the taxpayer would have to foot a bill of up to £1.8 billion.

The truth is that the Government are obsessed with modernisation and reorganisation. Many speakers have drawn attention to the difficulties that are daily becoming apparent from the restructuring of local government itself into the leader/cabinet model. There are one or two honourable exceptions, such as the noble Lord, Lord King of West Bromwich, who has found a reassuring way through it. Fortunately, the great icon of a "mayoralty" has so far proved to be less than popular with the electorate.

My noble friend Lord Bowness and the noble Lord, Lord Woolmer of Leeds, drew attention to the mayoral system and the lack of popular support. There have been several mayoral elections. The turnout has been disappointingly low, and the numbers voting in referendums in which a mayoralty has been accepted have been derisory. The new arrangements have given power to a limited number of highly paid councillors—the cabinet. Unlike the noble Lord, Lord Harris of Haringey, I do not believe that the cabinet system enhances transparency. It enables a small number of people to take over control of an elected council and has left beached the rest of the councillors who have been elected to serve their community.

Elected councillors have, traditionally, been accustomed to being strategic leaders. The noble Lord, Lord Woolmer of Leeds, drew attention to the fact that, nowadays, one must find a system of capacity building. In the past there was an apprenticeship system. Councillors learned from each other. Gradually, through that system, they learned to understand both what local government is about and how it is operated. All that is lost. Now, everyone has to devise systems of capacity building and training in order to ensure that those in the council not involved in the cabinet system are able to learn what to do.

Again, I do not agree with the noble Lord, Lord Harris, about transparency. It is extraordinarily difficult for anyone not involved in the cabinet system to find out in any depth what is going on. I speak as one who sits on a scrutiny committee and I can say that it is almost impossible to find out what it is that is being scrutinised and what lies behind it.

The whole system has raised many questions about the succession arrangements and about how to train future cabinet members. There is now hardly any role for the two-thirds of councillors left outside the cabinet to play in the decision-making process. If those who brought about these structures thought that acting as a "scrutineer" of policy decisions was going to engage the minds and hearts of those people, I fear that they were wrong. It is clear that the committee system had its faults, but it did ensure that all councillors felt involved, which clearly is not the case now. It is my view—it is also the view of the noble Baroness, Lady Hamwee—that these arrangements will have to be rethought before too long if we are to attract good—I would add, possibly any—candidates in the future

Perhaps I may turn to funding. The current funding arrangements for local government mean that between 65 per cent and 75 per cent of funding is provided by the Government, including the parcelling out of the business rate, while about 25 per cent is raised from council tax. All government finance is provided against the opaque structure of the SSA. In all my time in local government I have never known of a system that satisfied everyone, and the current one is no less open to complaint than any other. However, we are promised a further attempt and, indeed, a Bill has been expected. I am not surprised that nothing has yet appeared because I expect that, as always, the various interests are irreconcilable. But if new arrangements are to be put into place for 2003–04, which was anticipated, then the legislation cannot be delayed much longer or it will be impossible for councils to implement in time. Perhaps the Minister could give us some idea of when the Bill is to be brought forward.

Noble Lords have referred to many other matters during the course of our debate, such as the percentage of grant that is ring-fenced, the ridiculous criteria laid out for the performance of councils—they are to be categorised as "high performing", "striving", "coasting" and "low performing"—which requires further explanation, and the move towards centralisation. However, I have had time to refer to only a few of those issues.

I am sure that we would all agree that this has been a debate of experts and practitioners. It is clear from their enthusiasm and their interest that we discuss matters relating to local government on too few occasions in this House. I am grateful that we have had an opportunity to do so today.

5.44 p.m.

Lord Filkin

My Lords, I strongly concur with the concluding remark of the noble Baroness, Lady Hanham. In one afternoon we have tried to debate a White Paper, a Green Paper and probably the past 10 years of local government, along with the next 10 years. In future we must hold more debates on local government and on planning. We cannot do justice to the issues in such a limited time. I am particularly conscious of the difficulty of trying to do justice, in a mere 20 minutes or so, to the very wide-ranging and interesting contributions of noble Lords to this debate. I offer my regrets in advance that it will be impossible to respond to every point in that short time without being totally tedious.

I shall start by setting out that the Government are committed to trying to improve governance and services for the public at the local level. As my noble friend Lord King remarked, that is crucial. It is a serious endeavour and we all share in it. The Government's approach is based squarely on the belief that local government is an important sphere of government in its own right. I shall quote briefly from the White Paper: Even in those areas where local authorities act primarily as agents of central government, they cannot discharge that role properly if they arc over constrained by government. And we are clear that local authorities have a role which extends well beyond national priorities. They are a separate tier of government, answerable to local voters and taxpayers, with local priorities to pursue and a local community leadership responsibility to discharge". Varying degrees of cynicism may be expressed about central government, but it is crucial that those words have been put in writing by the Government so that, it is hoped, they give at least half the lie to the suspicion voiced by the noble Lord, Lord Dixon-Smith, that the Government are Janus-faced on these matters.

I shall turn to some of the issues that have been raised. It is wrong to assume that there is automatically a conflict between central and local government over many issues. Many of the issues that matter to people and to councils at the local level are also those which matter at central government level, whether that may be reducing crime, improving transport, raising standards in education or promoting better health. These things are common goals between central and local government. None can be fully achieved without the full and effective commitment of local government. Thus,local government is absolutely essential to the achievement of the goals set by central government just as, one suspects, a positive approach by central government is crucial to local government in order that it can fulfil its role in the way that many noble Lords have emphasised in our debate.

The White Paper therefore makes it clear that central and local government need to work together to try to agree a narrower range of priorities than perhaps we have seen in the past. It is easy to keep on generating priorities, but then local government finds it impossible to know how to respond. Quite rightly and, I think, quite bravely, the Local Government Association has stated that it wishes to negotiate what will be a core agenda. I hope that that is what is agreed across the parties in the LGA, rather than any other approach.

Let us look at some of the specifics. The comprehensive reform of the appraisal and assessment system has been talked about extensively, which is right because it will represent a major change. The noble Lord, Lord Hanningfield, helpfully and rightly acknowledged that performance appraisal and assessment is a reality of modern government. None of us can pretend that we should not have it in place and thus the debate has turned on how best it should be operated rather than on whether it should he done at all.

The system now being prepared by the Government will try to rationalise the inspection and assessment regime so that a lighter burden is put on councils: it is more comprehensible, it is objective in its judgments; it is undertaken separately from central government; and, above all, it is not simply about trying to put local authorities into a certain box or category. However, that in itself can be useful because sometimes it will challenge the complacency from which we can all suffer. Rather it seeks to focus on an action plan aimed at bringing about improvements in the best interests of the public, whom both central and local government serve. That focus on action and improvement is the centre of whether the new proposals succeed, as we trust they will.

In response to a question put by the noble Lord, Lord Bowness, we do not believe that it will cost any more money. It will be carried out within the Audit Commission's current budget and it should put less of a burden on local authorities if it avoids a constant sequence of inspectorates coming over the hill, which is sometimes commented on. The Audit Commission is currently engaged in an intensive process to develop the comprehensive performance assessment, the CPA, working actively with local authorities which in turn are engaging positively with the agenda rather than in an atmosphere of scepticism. Some 10 councils have volunteered to act as pathfinders.

Comments have been made about best value as being too bureaucratic, too expensive and so far not able to justify the costs of its input and processes. It is clear that in some authorities there is evidence to justify those comments. That is why the Government are looking to streamline best value and to try to make the system more effective. Equally, however, there is evidence from authorities that have understood the spirit and the challenge of putting the public first and of seeking to question fundamentally whether there may be new ways of doing things and whether they could be done more effectively and more economically. Evidence from a number of authorities indicates that that is bringing about significant improvements. There are not enough, but just because some people are finding the system difficult is no reason to abandon it.

A number of noble Lords emphasised the importance of democratic renewal. The noble Baroness, Lady Carnegy of Lour, said that it was vital. Unless the public feel that their democratic institutions, whether at national or local level, have some meaning and value and are in some way accessible to them and can be influenced by them, we will be in serious trouble in the future. It is a truism that it is easier to have that feeling at local level than at national level. That is why the renewal and reform of local government is so crucial.

There has been more debate than I expected about whether the current structural system within existing local authorities is working well or whether it should be abandoned. It is early days and there are divided views. In some areas the public clearly do not want elected mayors. It is right that they should be able to choose and there is no agenda to force elected mayors on authorities unless their public want them.

But I cannot believe that we are really and genuinely arguing that we should go back to the 19th-century committee system, in all its glory and with all the sham, which many of us recognise from our local government experience, whereby decisions were made somewhere else and rubber stamped through a committee process.

The noble Lord, Lord Greaves, drew attention to some serious issues in regard to declarations of interest. I should love to respond to them but there is not the time. I shall have to write to him on that.

The noble Baroness, Lady Maddock, rightly challenged the Government by asking, "Do you mean what you say? Will you do any of it because if you do, there will, in a sense, be a welcome for it?" Similarly, the noble Lord, Lord Bowness, also asked whether any of this would happen.

The thrust of the Government is to move to a different style of relationship with local government. They are moving away from a model that was basically dirigiste in style, that said, "Submit to us a plan. We will then give you a little pot of money. We will then have lots of people crawling over it and second guessing it, and that will deliver improvement". We are moving away from that model—which many recognize does not work effectively —to a system which tries to agree outcomes, that tries to incentivise local authorities to achieve those outcomes and that tries to provide them with support if and where it is needed to succeed in reaching those outcomes. It is a very different model of central/local government relationship from the "produce a plan and we will put it in a filing cabinet" model. It is one that we should strongly welcome because it is quite clearly a more sensible process than the traditional one.

Will the Government let go? We have put on record in the White Paper that we are dissatisfied with the current relationship. We have said that it does not make sense for 66 plans to be submitted by local authorities to central government. We have made a commitment to reduce that by half and we hope that noble Lords will give us some credit for that. We have said that we will reduce consent regimes, we will reduce bidding, we will reduce special funding and we will reduce the 30 area initiatives. I do not know why Calderdale does not have neighbourhood renewal, a point raised by the noble Lord, Lord Shutt, or why Bradford does not have other funding. These are good questions but I cannot answer them because I do not have sufficient time available or the answers to hand. We have said that we will streamline best value. We have said that we will give permission to trade where local authorities are delivering good services.

As to powers, local authorities have now been given a statutory authority to develop community strategies for their areas which states that they have to have the leadership role, working with and through local strategic partnerships. They have been given a power of well-being, for which many in this Chamber and other places have argued for decades. They have now been given the power to do something about it.

The Government are committed to promoting cross-agency working at local level and have given the LSPs the power to promote it and to rationalise partnerships. We have given, or will be giving, greater freedom to borrow, to invest, to trade and to charge for services. These amount to a significant range of changes to the powers and scope of local authorities. There are not as many as some noble Lords would wish, but they go considerably further than has been the case.

We have already ended crude universal capping and we have said that high-performing authorities will never be capped again, whatever level of budget they choose to spend, because they are seen to have a clear relationship with their public and have the right to make those judgments.

We will end things such as council tax benefit subsidy limitation, which sounds wonderful: we will stabilise finances; and we will abolish the SSA system and seek to bring in a fairer and more transparent system. I accept the challenge of the noble Baroness, Lady Hamwee, about whether it is possible because one has seen so many attempts to do so. The current aim, which I hope we will meet, is to bring it in by 2003–04. I acknowledge that that is a rapid timetable.

There was some discussion about community leadership. The noble Lord, Lord Woolmer, referred to the importance of partnerships and the importance of capacity building and skill development. I completely agree with him. In a sequence of serious race riots within local authorities last summer, we saw why community leadership matters. Without saying that those local authorities were singularly to blame for those race riots, clearly massive issues of community leadership arise as regards the integration of diverse communities. Central government cannot possibly do that. They can provide support and the environment, but only local authorities can address such challenges. The noble Lord, Lord Shutt, is right, the job is about making the area in which one lives always a splendid place to live. Again, that cannot be done by central government. The noble Lord, Lord Clarke of Hampstead, made similar remarks about Burnley.

Given the shortage of time, I cannot respond in as much detail as I would like on the issue of finance. The noble Baroness, Lady Byford, made important points about parishes and I shall have to write to her.

I totally agree with the noble Baroness, Lady Knight, about our attitude towards spending public money. We should treat it as our own—or twice as cautiously—which is why there should be pressure to squeeze what we have initially before we start asking for more money or more taxes. That is one of the messages at the heart of best value, rather than simply piling on more spend.

The noble Baroness, Lady Byford, also raised the issue of funding for schools. The White Paper contains some interesting comments in that respect and it would repay study.

As to partnerships between central government and local government at national level, we have come a long way in recent years. There is a positive relationship between the Government and the Local Government Association. The central/local partnership works well and people want to see it continue as a serious policy dialogue between central and local government.

We have seen a range of initiatives promoted to central government by local government. Local PSAs were promoted by the LGA; best value was promoted to the Labour Party by local government; and the idea of a limited range of priorities was promoted by the LGA. That is the reverse of the simple view of a central government telling local government what to do. We are seeing much more a pattern of central and local government looking together to address some of the significant challenges. The noble Baroness, Lady Pitkeathley, rightly gave positive credit to the creativity and innovation which is going on in many local authorities and which we should respect.

We need a separate debate on planning and the planning Green Paper. It is impossible to do justice to those issues today. We rebut the implication that things are okay and we can leave them as they are. The process of plan making, particularly in two-tier areas, is much too complicated and overlapping. It works on the basis of cascading planning policy from regional, to county, to district level, and that process cannot be carried out in fewer than 10 years. That is a nonsense given the speed of change in society currently. You cannot have a plan-making process which lags behind the reality of change in society.

No one is saying that counties have done a bad job and no one is saying that they have no role in the future, but, within the terms of a debate that recognises that we have to reduce the tiers of plan-making structures, we have to decide how best to harness the county contribution to a good planning system. The Government are interested in the contributions coming forward from the LGA and elsewhere within the terms I have suggested.

Turning to the subject of the regions, do people want change? Is it necessary? Will it happen? A White Paper on the matter will be published before the summer setting out the detail of how it will be addressed. It is clear in the manifesto that a move to regional government will not be forced on areas unless the public in those areas want it. So there is no fear that this is a further structural change without consent.

However, the Government stated clearly in their two previous manifestos that we cannot have a system whereby there is a two-tier structure in shire county areas, with regional government and parishes. That would be vastly too many tiers. Therefore, there will have to be a process—which I am confident will be fair and not pre-judged—which rationalises the two-tier structure into one tier; and whereby the public can gain some understanding of what that option will mean before voting on whether or not to have regional government. In a sense, they will be making a decision as to whether, in two-tier areas, they want regional government and a unitary system at the same time.

The noble Baroness, Lady Hanham, said that we do not need regions, we have counties. The public will have the right to make that judgment rather than central government. I believe that that is right.

I re-emphasise that this is not part of a general plan or view by central government that we need a widespread reorganisation of local government. I am sure that noble Lords will welcome that.

The noble Lord, Lord Woolmer, and others pointed out that it is easier to write White Papers than it is to implement them. Actually making the proposals happen is the crucial issue. The matter that gives me most comfort is that, rather than setting the proposals out on the page, central government have launched a process to examine how these complicated and important issues will be implemented. The Government will shortly publish an implementation plan setting out how they believe the proposals in the White Paper should be brought about.

The Government are also undertaking a major study between the Office of Public Services Reform and the DTLR, examining how government behave towards local government. The noble Lord, Lord Dixon-Smith, is right; even if it is not a question of being "Janus-faced", there are tensions as to how one gets government to behave with one voice, particularly one voice which supports the development of local democracy. The study is examining that issue and how central government can and should support local government in achieving its goals as well as the goals of central government. We look forward with considerable interest to the results of the study.

I regret that I have not been able to answer all the points raised—they all deserve an answer. I think noble Lords will understand why, given the scope of our discussions. This has been an important and valuable debate. We must have further serious debates on local government, given that it is responsible for a quarter of all public expenditure. We cannot do justice to the issues in the time allotted.

I hope that I clearly conveyed the sense that the Government are committed to supporting effective local government and to supporting it in moving forward, so that it is capable of playing the role which, without exception, speakers in this debate have affirmed as being important and necessary.

6.3 p.m.

Lord Hanningfield

My Lords, I thank the noble Lord, Lord Filkin, for his comments. I am sure that the noble Lord has stimulated further thinking on these matters. I was pleased to hear him say that there should be further debate, particularly on the Green Paper on planning, the White Paper on local government and in relation to the regions. With those thoughts, I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.