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My Lords, I declare my interest as a Cumbria County councillor. I well remember my political apprenticeship on Oxford City Council in the 1970s and those enjoyable debates with the noble Lord, Lord Patten. I also remember an unhappier time in the 1980s when I was a member of Lambeth Council. The events there did a lot of long-term damage to the reputation of local government. I am now delighted to be a member of Cumbria County Council in the native community I grew up in, where, if I might say so, the Labour group that I attend reminds me so much of the Labour Party I dearly love.
The central thrust of my argument is that, with the public spending review coming up this year, it is essential that the Government set up an independent inquiry into the structure and future financing of local government in England. Although he is no longer in his place, I recommend that the Government might invite the noble Lord, Lord Kerslake, to chair such an inquiry. These are centrally important issues. I think Ministers will accept that the Government have no bandwidth to address them themselves in the coming months because of Brexit, but they have to be looked at. What better means of doing that than by having a quick but independent look at these questions?
I will argue why this is essential from my experience in Cumbria. Cumbria is not like Newcastle, about which my noble friend Lord Beecham, with his wonderful record of service there, spoke so eloquently. It is a mixed place: half of it is rural market towns, relatively affluent, and attractive to incomers and tourists, but the other half is very industrial or post-industrial, with pockets of deep deprivation and a lot of places that feel left behind, as we say nowadays. One of the extraordinary things about Cumbria is that, if you contrast the ward on the west coast in Workington with the ward in the east of the county near Penrith, you will find that there is almost a 20-year difference in life expectancy. That is shocking.
Our authority’s spending this year—its net revenue budget, taking out direct schools grant and all the rest—is about £380 million. This year, we have to make £39 million-worth of savings, bringing the total savings we have had to make since 2010 to £200 million. Half of the authority’s spend goes on what is called the people directorate: the care of children and adults. There are still immense strains on adult social care, but the crisis of the moment is around looked-after children, for which we set a budget this year of £43 million —we now think that we will have to spend £54 million. While we are cutting £39 million, we are coming under intense pressure on looked-after children. That is in part because of a rise in numbers and in part because of a rise in the cost of placing people in residential accommodation.
For the future, I see very little happy prospect without some uplift in government grant. On present projections, we are required to make some further £50 million in savings over the next three years, unless public spending projections change. I simply do not know where this will come from. We are looking rather desperately at trying to cut the cost of social care placements for people with very special needs.
There is one opportunity to save a lot of money in Cumbria, but it is in the Secretary of State’s hands. We could have a local government reorganisation, which would create a unitary authority. It is estimated that that would produce savings of £25 million. An application from the county council to this effect has gone to the Secretary of State, Mr Brokenshire, and I hope he is looking at it seriously. It is a difficult problem for the district councils and the MPs because people do not like this change. But in the financial situation we face, it would be irresponsible for the Government not to permit this to go ahead.
For the longer term, we need a change in government policy on the financing of local government or else we will face the total evisceration of local services. I think about all the grants in the area that I represent and all the local organisations that will have to close: the library will have to close and we will not be able to keep supporting our baths and our theatre club. David Cameron used to speak of the big society. It is the big society that is suffering most from this deep austerity.
I recognise that there are many claims on future public spending, but I hope there is consensus—I would like to hear this from the Minister—that local government has borne a disproportionate share of austerity and that this now needs to be corrected in the coming public spending settlement. Of course, if we want to have decent services, we will have to pay a bit more tax, not just at the top but one that everybody can afford. Social care is a real test of this. We cannot address the question of social care without a willingness to pay, and I think that there would be such a public willingness to pay.
My argument is this. Yes, local government has coped remarkably and has had to continue to innovate boldly in its provision of services. Services have to change; they cannot be preserved in aspic. We have to be innovative, but national government has to help local government in this situation. As mentioned by the noble Lord, Lord Kerslake, we have to have a long-term plan for structure, finance, how we handle business rates and what the Government want local government to be able to achieve. We need an urgent independent look at this at this time of wider national crisis that makes it so difficult for us to concentrate on these questions.