Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.Donate to our crowdfunder
My Lords, I begin by declaring an interest. Three weeks ago today, I was elected councillor for the London Borough of Sutton for the tenth time. More importantly, on the same day, the Liberal Democrats were elected for a seventh term running the London Borough of Sutton with a greatly increased majority. Contrary to what some have said, Liberal Democrats are used to being in Government. Liberal Democrats are used to making difficult decisions and they are used to doing so under much greater public scrutiny and public accountability by those most directly affected by those decisions than can ever be possible at national level.
Indeed, it can be said that Liberal Democrats probably have more experience than any other party in making coalitions work. At local level, successful coalitions all have two things in common. All of them are based on policy agreement and policy compromise, and all of them are for a fixed term with no get-out clause or option to go to the electorate early. So we have much to learn, but also some experience to share.
I very much welcome the appointment of my noble friend Lady Hanham as the CLG Minister in your Lordships' House. We were London council leaders together throughout the 1990s. Perhaps more important for this Parliament, we were for many years together UK representatives on the Committee of the Regions, which represents local and regional government in the EU's decision-making process. I say "for this Parliament" because the Lisbon treaty gives greater power and recognition to what I will abbreviate as "sub-state government" in monitoring subsidiarity, as well as to national parliaments and devolved assemblies. I therefore hope that, together, we will be able to bring to your Lordships' attention both the relevance of the European Union to local government and the relevance of local government to the European Union.
On the gracious Speech and the coalition agreement, I of course welcome very much the commitment in the agreement to,
"the radical devolution of power and greater financial autonomy to local government and community groups".
Cynics say, with some truth, that devolution of decision-making is always much easier when the decisions are likely to be difficult and unpopular. That is true. However, I strongly believe that it is all the more important that these difficult and unpopular decisions on how to reduce budgets-or, properly, how to work smarter and do more with less-are made at a local level. That is not just because the direct effect of decisions can be seen and felt at local level, but because, if we are to have any hope of restoring faith and confidence in government in its widest sense and in politicians at all levels, it will be essential for local decision-makers to engage effectively with their local communities in the difficult decision-making process that lies ahead. If these decisions are simply imposed by local authorities, the responsibility for them denied and blame put elsewhere, there is no hope of restoring public confidence. I listened with great interest to the excellent maiden speech of the noble Lord, Lord Bichard. He points the way. In fairness, local government is already well ahead of central government in working in that new, smarter way. That must be how we tackle difficult times ahead.
Of course, there cannot be the fundamental shift of power sought by the coalition agreement unless and until local authorities have the greater financial autonomy that it promises. It promises a review of local government finance. I understand why it had to be worded that way but, in reality, we do not need yet another review that takes years and ends up being parked for ever on the "too difficult" shelf. There has been no shortage of reviews, from Layfield to Lyons. There is no shortage of academic and political material available on the various policies. There is ample experience of different local government financial systems all over the democratic world.
We now need a commitment to implementation from the coalition Government. This is not the time for me to suggest what that system should be, if indeed I had the temerity to suggest that there was a simple system. There manifestly is not: it is full of complex and difficult decisions. There are many alternatives, including some interesting proposals from the Local Government Association, in the wider context of Total Place, that I hope the Government will look at seriously.
I hope, after nearly a lifetime in local government, that, by the next general election in five years' time, we will have a system of local government finance that enables local authorities to raise a greater proportion of their funding locally and be less dependent on central government grants; a system that is far more transparent and understandable; and a system with a much fairer relationship between levels of expenditure and taxation. Without that, we will not truly have a radical devolution of power.
Turning to particulars, in common with almost everyone else in local government, I welcome the abolition of the Government Office for London. Indeed, it is remarkable that it is still there 10 years after the creation of the Greater London Authority. I particularly look forward to hearing the new arrangements for liaison and communication between central government and London government in all its forms. Are we to have a Minister for London? What will the communications channels between central government and the various levels of London government be?
In many ways, what happens with the Government Office for London will be the first practical test of the Government's commitment to radical devolution of power. What new powers will go to the GLA and-perhaps even more important as a test-what powers will go to London boroughs, individually and collectively? How much real power will actually be shifted back into central government? That will be a real test, the outcome of which many of us will watch with great interest.
Finally, I turn to an issue that is not in the gracious Speech or in the coalition agreement, much to my surprise and regret: electoral reform for local government. I always used to believe that local government would be the first sphere of government to be elected by proportional representation. In many ways, it is ideally suited to proportional representation. We already have multi-member constituencies; we call them "wards". We have a system under which we would get a much fairer representation of voter choice than at present. Now, however, local government in England and Wales may well be the only sphere of government left with the first-past-the-post system. That makes no sense at all, and I hope that this is an accidental omission from the coalition agreement. I feel sure that it must be an omission and that, in the localism Bill later in this Parliament, we will perhaps be able to show that it is and that electoral reform will indeed extend to local government in England and Wales, as it already does in Scotland.
The coalition agreement promises much for the rejuvenation of local democracy. I look forward hugely to contributing to the fulfilment of that great objective.