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My Lords, I draw the House’s attention to my interest as a vice-president of the Local Government Association. The situation that local government finds itself in is unprecedented. Over my 16 years as the elected Mayor of Watford—the noble Lord, Lord Beecham, may be interested to hear that this covered several Governments, including the last Labour Government—I lived, battled and struggled with these changes.
We are now in an era of increased demand, in particular for services for the elderly, children with special needs, those in social care and homeless families. Yet councils have fewer resources than ever to deal with these demands, and some are at breaking point. This situation—where think tanks, eminent charities, unions and the Local Government Association all agree that the current situation is unsustainable—is the culmination of well over a decade of year-on-year cuts. These need reversing. Local authorities need a significant injection of cash now.
While the impact on these services has been gradual but significant, it has been different in different types of councils, in different areas and in different parts of the country, which is why it took so long to get a collective national agreement that local government is underfunded and at crisis point. As emphasised by the noble Lord, Lord Patten, the narrative until very recently, heavily peddled by some Secretaries of State, was that there was plenty of money sloshing around local authorities, reserves were high, they had plenty of capital assets and they were juicy pips that needed a good squeeze. In truth, local government surpassed itself in trying to cope with reduced funding, often finding innovative and enterprising ways to generate income and protect services. As in any sphere of public administration, not all councils were perfect, but each pet peeve of a Minister, an MP or the TaxPayers’ Alliance made a headline that served to reinforce this negative view of local government as an easy target for austerity cuts. By absorbing a lot of the early cuts through innovation and good practice, we found that, instead of receiving due recognition from the Government, we had simply fed a narrative that we could be cut still further.
Back in Watford, we discovered that you could only go so far with efficiency savings. Sharing services, doing more with less, streamlining services and taking out duplication were the stock phrases that we all absorbed. But there comes a point when there is really nowhere for councils to go but to cut services that are relied on by very vulnerable people.
I sincerely hope that it is now irrefutable that local government cuts have impacted on the poorest people in the poorest places. They are also those people least able to both cope and protest about it. It is not only the welfare and benefit cuts but the luncheon club not operating or the reduced days that the library is open, the community centre offering fewer activities and the youth services that are slashed. Often the precise impact of cuts is underestimated because the real problem can be the compound effect of cuts by different councils in two-tier areas, of local charities and of partners in the same area all scaling back their provision because of the loss of grants from the local authority or funding from health and well-being boards, which are all cutting back. It seems that nobody is holding the ring for the cumulative impact on a neighbourhood except councils—and we, for too long, were not listened to.
Even street cleaning and bin collections impact most on the poorest areas. While we and other councils bent over backwards to prevent the front line being cut, that was unsustainable. The front line is being impacted more and more. Our staff are up against it. Staff reductions have meant that there is just no slack in the system. District councils are feeling it the most. Services that prided themselves on being proactive, such as environmental health and enforcement services, have been pushed into reactive mode, fearful of yet more work coming down the tracks and feeling overwhelmed and unable to respond.
On the recent Homelessness Reduction Act, for example, every councillor I knew applauded the Government’s intentions, but also dreaded not having the resources to do the job properly. I applaud those thousands of staff who with expanding workloads even worked unpaid overtime, with new roles, more responsibilities and far less funding, and still served their communities well. Yet a recent Unison survey showed that their morale is low and their confidence level in being able to deliver for their most vulnerable residents is dropping.
Many services report that there is a worrying increase in the impact of funding cuts on the mental health of their residents. Our housing partners will say that nowadays what was once exceptional behaviour is becoming commonplace and that the resources to deal with it are just not there. Access to services is more limited, there are longer waiting lists and the entry bar for help gets set higher. With the health service, running red is now the new normal. Even police services admit that they are now pushing back on mental health-related issues that they used to take in their stride. Is that really what we want?
As for prevention, upstream work, which we all know works and will ultimately save us money, is being squeezed out. It is a short-sighted, costly mistake. We are being pushed into sacrificing long-term solutions and sustainability for short-term expediency. For many, just legally setting next year’s budget is as far as they can look.
The Government are holding out for the holy grail of the business rate retention to give a major investment of cash to local authorities—but will it? Councils are already collecting an increasing amount of business rates for central government, while their revenue support grant continues to be cut. Surely it is time to redirect this money back to local authorities and local communities. With the rumours coming out regarding the fairer funding formula, which appears to be taking deprivation out of the formula in favour of “rurality”, will we see a further increase of the least-deprived areas getting the most money? The staggering 2015 survey by the Joseph Rowntree Foundation showed that that was the case. More recently, the IFS concurred that the most deprived local authorities had seen cuts of £220 a head compared with cuts of £40 a head in the least deprived areas.
I remain uncharacteristically pessimistic about the future without a radical overhaul of local authority funding. Which tax has to have a referendum before it can raise more money? The answer is none except council tax—and if a similar measure is required the following year, it needs a second referendum. This capping, plus years of central government diktat making councils keep council tax rises low, has contributed to the state we are in. It is surely time to end this.
Finally, and very worryingly, two recent reports from the APPG on children in social care highlighted how financial cutbacks have meant that local authorities can now intervene only when problems reach crisis point and children’s lives are potentially at risk. Early intervention work no longer happens, and social workers are overwhelmed by large case loads, high turnover and poor supervision. These problems for the future are stacking up now. Our children are the future, and they deserve better.