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My Lords, this very great debate has concentrated on four aspects of the spending reductions: the timing, the speed, the size and the distribution. Along with other noble Lords, I want to concentrate particularly on the last of those-the distribution. In doing so, I follow some excellent contributions from the right reverend Prelate, the Bishop of Leicester, and the noble Baronesses, Lady Campbell and Lady Hollis, among others. I want specifically to talk about the situation in local government, and in doing so I declare an interest as a member of Pendle Borough Council in Lancashire.
If there are to be cuts, no one in local government believes that local government should not carry its fair share; the question is what the fair share is. There is an increasing concern and realisation within local government that the sector is perhaps being hit rather worse than others. The figure of 28 per cent over four years has been given as the reduction in the government grants. The problem with local government finance is that it so is complicated that, as the Government have not yet made any crucial announcements about the distribution of the cuts, it is difficult to be certain what will happen. However, there seem to be at least three major problems.
The first is that the cut to the main grant to local authorities-the formula grant-is to be front-loaded. That will put local authorities in an immediate difficulty because, of the four years of cuts that are to come, the highest cuts are to be in the first year. The treasurer of my council suggests that the cuts will be 10.7 per cent in the first year, then 6.4 per cent in the second year, 0.9 per cent in the third year-which is a curiosity that I do not understand-and 5.6 per cent in the fourth year. My view is that, as the fourth year will be a general election year, that 5.6 per cent cut will probably not happen, but the first two certainly will and they will cause real difficulties.
The second general problem is that, for the very best of reasons, specific grants are being abolished and "rolled up" into the formula grant. The way in which that will impact on individual authorities is problematical, to put it mildly. Many of the specific grants-area-based grants and others, such as the working neighbourhoods fund-have been specifically allocated to authorities on the basis of indices of disadvantage. There is a real danger that, if those grants are wrapped up in the general grant, the authorities that have been defined as being in the most need will miss out the most.
The third problem is that the proportion of council budgets that is accounted for in formula grant and revenue grants varies enormously from council to council. The figures that I was given in a Written Answer just before the summer suggest that the proportion varies from 10 per cent to two-thirds of a council's budget. Most of the councils that you would think of as being in disadvantaged areas-if I may use that phrase-are clearly those that receive a higher proportion of grant. That is for very good reasons: namely, their needs are greater and their local resource base is smaller. However, there is a real risk that, in rolling everything up into the formula grant, the councils that will be hit hardest will be those most in need of support. In other words, the changes in local authority grant will result in a redistribution from poor areas to rich areas, to put it in fairly basic but accurate terms.
For my council and neighbouring councils such as Burnley and Blackburn, which are in the top 50 in the country under the indices of disadvantage, it is suggested that the revenue grant reduction, taken as a whole, may well be over 20 per cent. Similar-sized councils in leafier areas-not all but many of them in the south of England-may get by with significantly lower reductions. This is, I believe, a major test for the coalition Government. If the fears turn out to be true, the coalition will be wide open to accusations of favouring rich Tory areas against perhaps less rich Labour and Liberal Democrat areas. That is not what I am saying, but that is the accusation that will be made and it will be very difficult for people like me to defend it. In fact, I shall be standing up and saying it myself if that happens.
I want to give the House one example of the difficulties caused by the move from specific grants to rolled-up general grants. The example relates to the position of the Lancashire Police Authority-which covers the area in which I live-on police community support officers, or PCSOs. There are 427 full-time equivalent PCSO posts, of which 409 PCSOs are in post at the moment. The police authority has started a formal 90-day consultation process with a view to disestablishing all 427 PCSO posts from
The basic problem is that the PCSOs are all funded by specific grants to the police authority rather than from the police authority's general budget. If that grant was taken away and the police authority general budget was secure and not being reduced, the authority might be able to cope, but at a time when the grant towards its core budget is being reduced, the police authority will find it impossible to fund the £10.5 million a year that the PCSOs cost. Some £8.2 million comes from direct PCSO grant from the Government and the rest-£2.3 million-comes from other contributions, many from district councils and unitary authorities within the police authority area that will obviously be under very severe pressure in respect of their own services. Therefore, the relationship between the specific grant and core funding-and whether the new system in which all the grants are rolled up takes account of the existing provision provided by those specific grants-is crucial. We will wait to see what happens.
Why do PCSOs matter? They are the basis of an extraordinarily successful community policing system in Lancashire, which was a pioneer of modern community policing about seven years ago. That system has been rolled out throughout the county and is a fantastic success. Every ward in the county has a small community policing team consisting of a constable called a community beat manager and a community support officer-a PCSO. They act as friends and support for residents. They do an enormous amount of useful work in the community among traders, schools and wherever there are problems. They act as the eyes and ears of the police in the community. There are residents meetings called PACTs-police and communities together-as well as a community safety partnership involving councillors, residents, traders and voluntary groups. It is incredibly successful. It works. I have received two pages written by a local PCSO that have been provided to me by the county's UNISON branch.
What PCSOs do is fantastic. They are involved in everything from keeping a friendly eye on well-known local criminals, and making sure that they know what those people are up to, through to road safety for kids. It works. The levels of local crime-burglaries, drug offences, vehicle crime, criminal damage, less serious assaults and, in particular, anti-social behaviour-in my part of the county and throughout the county have plummeted. PCSOs are there on the ground doing what everybody wants them to do when we talk about bobbies on the beat. They are a modern form of bobbies on the beat. They do not just walk up and down every street in a regulated way; they are part of and work with the community. As somebody who attends the PACT meetings in my ward and works with the local community police, I can say that it really works. The detection rate in Colne at least, which is the highest in the county, is about 40 per cent. That is incredibly high. In the case of serious and organised crime, the PCSOs are the people on the ground who have the basic information when something important happens, so we do not have to start from scratch.
Community policing has been a Liberal Democrat talisman policy for many years; the Conservatives have always stood as the party of law and order. These are front-line services-the front line of the thin blue line, if you like-and they are the big society, because the whole community is involved in what goes on. I do not believe that a Government consisting of Liberal Democrats and a majority of Conservatives can possibly tolerate a situation in which the incredibly successful scheme that has been created throughout Lancashire in the past few years is done away with. Building things up takes time; doing away with them can be achieved overnight. I do not expect the Minister to give me detailed answers on this, but I hope that he will bring my remarks to the attention of his colleagues in DCLG and the Home Office.