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Local Government Finance Settlement — Motion to Take Note

Part of the debate – in the House of Lords at 5:16 pm on 9th January 2014.

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Photo of Lord Smith of Leigh Lord Smith of Leigh Labour 5:16 pm, 9th January 2014

My Lords, I thank noble Lords for their contributions to today’s debate, particularly the right reverend Prelate the Bishop of Ripon and Leeds. I wish him well in his retirement. This has been his last debate; he has made important contributions to this House.

There has been considerable agreement in the House, and certainly a passionate view, that localism is the way that we should go forward. Many noble Lords referred to the impact that the cuts will have in future on vulnerable people. My noble friend Lady Donaghy talked about the impact that they will have on the workforce, some of whom will lose their jobs, but those who stay in jobs have also faced a pay freeze for three years and now a 1% rise, so their real standard of living is going down.

I hope that I did not give the impression that the noble Lord, Lord Shipley, claimed that I did: that I thought that local government did not need to change. As someone responsible for local government finance, I began to make my decisions about the future in 2009, when I realised that things were going to get tough from then onwards, so I prepared my authority to deal with that. We cannot go on simply doing the same round—I think the Minister responded somewhat to that—we need to rethink the way we deliver all public services, not just local government. We need to do it on a place-based system.

There are many ways in which I could save money for the Ministry of Justice but, frankly, I am not going to spend a penny on that unless I am sure that I will get a return for it. That is the incentive I want from the Government. Tell the Ministry of Justice that we can keep people out of prison if we give them more support, but only if we get some incentive to put our investment in.

The Minister gave a robust defence of the Government’s position; I am not sure that she was on firm ground all the time. Spending power is a very arbitrary definition of what is going on in local areas. There is much in it; there is much left out. When we had a proper place-based settlement we understood how much money was going in and it was in the control not of local authorities on their own but of local authorities working in partnership with other agencies. We need to get the DWP to recognise that we are not going to get people into jobs from offices in Whitehall or Manchester—it will be local people on the ground who get people back into work. That will have the biggest impact on public spending, because families with incomes from employment, on the whole, do not depend on public services like those who do not have jobs.

I was a bit surprised when the Minister suggested that it was in local authorities’ interest to paint things in the blackest shades. I have never done that about my authority; I have simply pointed out where there are differences in the way that authorities are run. Noble Lords gave examples of death rates in different areas, which I think adequately illustrated that.

Early intervention is the key going forward, but in many areas of local government, we have limited ourselves to critical needs. When we have a Secretary of State who seems fixated with the frequency of bin collection, I think that says it all.

Motion agreed.