My Lords, I raise an issue faced by many councils around the country. They have faced massive cuts in their expenditure over the last few years. They have been forced to privatise services, been stripped of powers and in some cases been forced to cut services altogether. Those services that are left have been cut to the bone.
How did we get to such a state in our local government? Before I arrived in the other place I was leader of my local authority. When I first became a councillor 40 years ago, my authority could set its own council tax and decide the level of services it wanted to provide. It could also decide whether it wanted to provide those services directly or contract them out. Voters could then decide whether the services they received were the services they wanted and whether they were cost-effective.
But then it all changed. The Conservative Government of the day decided that public was bad and private was good. No real assessment was ever done to see whether this was true. The policy was driven by dogma rather than any sort of research. To make things worse, the Government moved away from a needs-based funding system to a political system based on the whim of the Minister. The new funding system moved funding from some of the poorer areas to the richer areas. That can be seen today, when some local authorities face bankruptcy while others are awash with cash. We have been talking about Westminster Council and Kensington and Chelsea. They have loads of money, while other local authorities have none and face bankruptcy.
When I was a council leader, I asked my finance staff to do an assessment of what it would mean if we had the same level of grant as Westminster. I was amazed to find out when my officers told me that we would have to levy no council tax whatsoever. We would be able to improve council services and send all our residents on a Spanish holiday at the end of the year. That shows noble Lords the level of fix that went in at the time. That system is still in place. Our funding system is corrupt. Our council services are less accountable and less transparent than they were. Our services are far more expensive than they need to be.
How can we rebuild our council services and support for our public sector workers in local government? Our funding system should be set by an independent academic body. It should move back to a needs-based system. We should stop the enforced privatisation of our council services. We should once again give our councillors direct, democratic control over the services. Unless we do so, we shall face a growing divide between rich and poorer areas. Some councils will not even be able to provide basic services in the future. Our councils will continue to be more expensive than they need to be. They will be less accountable, less transparent and less democratic than they are at present.
I hope the Prime Minister will not just say but do the right thing and make our country less divided than it is now. Had I had the time to make the point, I could address the same issues on health, police and fire funding, and for many other services. We need to have a fundamental review of the way we fund public services in the UK. Quite frankly, it is a terrible indictment that the richest areas are getting the most and the poorest areas are getting the least.