My Lords, I thank the noble Baroness, Lady Perry, for securing this debate, which is extremely well timed. I also congratulate the right reverend Prelate the Bishop of Derby on his superb maiden speech. I am relieved to hear that his experiences of being accosted in this House have nevertheless been pleasant ones. He had a distinguished academic career at the universities of Oxford and Cambridge. He has written several books, including one intriguingly entitled A Challenge to the Churches. His personal calling into the church began as a curate in Wolverhampton in 1976, and he eventually became the Bishop of Derby in 2005. We welcome him to this House. Clearly, by the quality of his speech today, he has much of value to contribute.
I also look forward to hearing the maiden speeches of the noble Lords, Lord Knight and Lord McAvoy.
Local communities should be a voice, not an echo. They should have their own distinctive say in what happens to them locally and not be controlled by central government. There is simply no more life in the old dogma that Whitehall must control. Therefore, I am glad to see that the Government have already scrapped home information packs and intend to remove a layer of regional government which, frankly, was a barrier, not a boon, to local communities.
The relationship between local and central government turned into a sort of verbal volleyball until more power and control was sucked to the centre of Westminster. It is not that we are slow to learn; we are just too quick to forget. We forget that the small, the personal and the local work much more easily with the grain of human nature. The noble Baroness, Lady Perry, set out some superb examples of how local communities can work effectively.
I was born and raised in a place that many people call paradise-Birmingham, just off the M6 motorway, by the gasworks! But Birmingham is a prime example of a city where innovation thrived, through businessmen such as George Cadbury, and where political careers had their start, as in the cases of Joseph and Neville Chamberlain. We also produced Ozzy Osbourne, but that just goes to show what a diverse talent base the city has. In localities across Britain there is immense untapped human potential, but this is not fostered by target-driven, top-down government which is tied up with bureaucracy and wants to micromanage. It will be an encouragement to the new coalition Government to know that Birmingham, which is the largest council authority in Europe, has had a working Conservative-Liberal Democrat coalition majority for more than six years.
A century ago, Birmingham, Manchester, Liverpool, and Newcastle were the economic powerhouses of the world. Now they have only half the GDP per head of major European cities. After London, the next English city in the European league table of economic performance is Bristol at number 34. That simply is not good enough. The sad fact is that local councils today have lost the power to fight urban decay, crime and social breakdown. Less than a tenth of the money spent every year on regeneration has been spent by local government. The rest has come from regional development agencies, learning and skills councils, the homes and communities agencies and other regional agencies, bodies far removed from the local people.
Since 1997, nearly 300 pieces of legislation have been enacted with the words "local government" in the title. It is said that democracy is free, but it is not cheap. Since 1997, the cost of monitoring local government has ballooned to £2 billion. We can learn lessons from abroad. Countries like Germany, Sweden, Denmark, Switzerland and America have a high level of devolved power over a host of public services. It cannot be a coincidence that the voter turnout in UK local elections is about 35 per cent, compared with 80 per cent in Sweden, 70 per cent in Germany and 60 per cent in France. We are reaching the stage, in the UK, where local people will be neither for nor against apathy.
There are key issues to be considered. In our largest cities, I would support the policy of an elected mayor who can provide a city with strong leadership, but it should be for local people to decide in each case. Ideas either fly or die, but the office of an elected mayor has shown itself to be an effective model all over the world. It would be for local people to ensure that the chosen mayor is not a nightmare. Government need to give local communities a share in local growth. There should be financial incentives, such as reduced council tax, to local authorities which deliver the housing that local people need. Local councils should be able to retain the financial benefits arising from new business activities in their areas. They should also be given the power to levy business rate discounts. Local firms should have the power to challenge effectively any planned business rate increase.
In Germany, all council planning departments have incentives towards developing land for residential and commercial use. Last year, in this country, we completed just over 118,000 houses, the lowest level of house building since 1946. Germany seems to do it much better. So, not only did the Germans beat us in the World Cup, but they can also teach us a thing or two about local housing development.
The regional development agencies have spent more than £13 billion to date, but the Institute of Directors and other business bodies have complained that the RDAs lack both a prominent profile in their regions and have insufficient empathy with the needs of business. Some areas of the UK are clearly underperforming. That is bad for local people and for the national economy. I am encouraged to see that the Government intend to replace regional development agencies with local enterprise partnerships between local authorities and business.
I believe strongly that community and faith groups should be given the opportunity to bid to run local services, as they know what they want and are often better placed to do so than state bureaucracies. The right reverend Prelate the Bishop of Derby has given some superb examples of that. I know of a number of Christian groups who see it as part of their calling to be actively helping others in their locality. For them, it is more than a job or a career, but they often lack sufficient funding. This will help to set the foundations for the big society, about which I am sure the noble Lord, Lord Wei, will want to say more.
Devolving power to local communities is the only way forward in these difficult economic times. Yes, it will put more responsibility on local leaders to innovate and to use their increased powers wisely, but they will become stronger for it.