Debate on the Address

My Lords, I intend to concentrate my remarks on one element of the gracious Speech—namely, the proposals for reform to local government. As we have so recently seen the White Paper, we have a much better idea about how that legislation might be framed. The other Bills proposed in the gracious Speech will be covered by my noble friends during today’s debate. The gracious Speech was silent on the question of housing, and on these Benches we see that as a glaring omission. A lack of affordable housing for rent is becoming an increasingly urgent issue. Recent reports of key worker housing for purchase lying empty suggest that the Government need to review as a matter of urgency their policy of investing in affordable housing for purchase at the expense of affordable housing to rent. Their current policy is leaving many thousands of families in overcrowded, unsuitable and poor-quality housing. Independent academic studies have shown that we live in the most centralised state in Europe, with the exception of Malta. The past 30 years have seen a steady erosion of local powers and an increasingly centralised system of finance, controls and regulation. The result is that decisions are often made in order to conform to Whitehall imperatives and not those of local people, and so accountability has been lost. What follows from that is an increasingly disillusioned electorate. The White Paper recognises some of that and draws attention to the fact that only 42 per cent of residents are satisfied with their local council. But it fails to see that a far higher percentage of people are satisfied with the services provided by their councils, such as parks, libraries, recycling and so on. There is something about ““the council”” that the public do not much like. That is the issue that needs to be addressed because not only is turnout declining but it is becoming harder to find council candidates. In our view, the situation has been exacerbated by the voting system, which has allowed the development of one-party states, and often the same councillors are in place for many, many years. That can lead to councillors who are out of touch; worse, it can lead to decision-making that favours particular geographic areas; and, at the very worst, it can lead to poor standards of behaviour that tip over into corruption. But thankfully those situations are very rare, and there would be much less justification for heavy-handed interventions from the Standards Board in England if the ballot box were a more responsive mechanism. On that point, I hope that the legislation which is required to provide for more local determination of Standards Board cases will be brought forward very soon, as it is now long overdue. We believe that a proportional voting system—doing away with single-party fiefdoms—would make local government councillors much more responsive to the communities they serve. It will prove very difficult for government to enforce a statutory duty to engage, devolve and consult with communities, because these are essentially cultural things. These are benefits that flow from having a culture of community involvement within a local authority, which the current voting system, alongside Whitehall dominance, can often stifle in a local area. The White Paper makes some very useful suggestions about how to find new councillors and how to broaden the background from which they are drawn. But it misses the essential point that with the autonomy of local authorities severely curtailed by central control and with the power within councils becoming vested in fewer people as a result of the 2003 Act, the role of the back-bencher is simply no longer seen as worthwhile by many people. I fail to understand why the Government feel that councillors somehow have to scale down their decision-making involvement to concentrate on constituency work. It is entirely possible, and always has been, for local councillors to be committee chairmen or cabinet members and extremely good and effective advocates for their local communities. In another place, we do not hear the argument that Ministers should not be constituency MPs because they are Ministers. I fail to understand why one set of rules applies to local authorities and another to Members of the Commons. Back-bench councillors are now told that they have to concentrate on scrutiny. That worries me because scrutiny is essentially a backward-looking process. It very easily becomes an entirely negative process, looking at what has gone wrong with something. Would it not be better for the energy of councillors to be harnessed in the development of policies and in decision-making from the outset rather than having to look back? No wonder fewer people vote. Why on earth should one bother to vote for a councillor whose main role in life is to scrutinise the decisions of a very few people in a council? Localism has now become fashionable but it is not new to the Liberal Democrats. We have been implementing community politics for decades. The thrust of the White Paper is said to be devolutionary and, indeed, it proposes a statutory duty on local authorities to devolve to communities, but we do not see real, serious devolution from central to local government or from quango to local government in the White Paper. It seems to me that there should be a matching duty on central government to devolve to local government before local government can devolve much more. On these Benches we have always been keen to see a written constitution which defines and protects the powers and the relationships between the various elements of our country's governance. Under the Local Government Act 2003, councils were forced to consider alternative arrangements to committee systems, even when the committee system had worked well for decades. The White Paper proposes going further down that path. It intends to vest all executive authority in one person and no referendum proposal is enshrined. We believe that to put all executive authority into one person is a highly dangerous move in that it removes all the checks and balances to abuse of that power. I fail to see how one can argue that it is essential to go down that route to provide good and speedy decision-making. All large private companies have boards of non-executive directors whose role is to provide a range of expertise and experience, to offer advice and, ultimately, to provide checks and balances on the way in which a company is run. Indeed, the Government have legislated to strengthen the role of non-executives in the private sector and has added to their responsibilities—quite rightly too. Why then are they moving in the opposite direction for local government and removing checks and balances? There are also practical reasons for being concerned about that proposal. From where are the leaders and mayors of the future to get their experience if there is no committee or cabinet system through which they can work as preparation? How are colleagues to know whether someone is fitted for such a role if the person has not been tested in some other way? Have the Government considered the likelihood of a leader being elected from a single-issue pressure group which, at the time, campaigns on something that happens to be controversial in a local area? Such a person would end up having sole executive authority over an enormous budget and services essential to local people for a four-year period. The White Paper mentions having directly elected cabinets under some models. As far as I can tell, that would involve asking voters to elect their executive leader, cabinet and ward councillors. They would presumably be doing all that twice in two-tier areas. The Minister says that the aim of the Bill is to provide more transparency. The White Paper has it about right on unitary status: it should be a matter for local determination. However, when the Bill comes forward, we will look closely at the proposed decision-making process: what the triggers will be, who will have a vote in any local referendum, how consensus will be judged to have been achieved and who, ultimately, will sign off a decision. The White Paper recognises that there are legitimate communities of interest as well as geography. We will support measures that allow their aspirations to be met. Our concern, however, will be to uphold the principle that there is always transparency and accountability where public money is being spent. We do not want to see local mini-quangos any more than their larger counterparts. Much is already being done on community involvement. The White Paper contains many examples of best practice. We would prefer the Government to take the route of sharing best practice, rather than one-size-fits-all regulation. Local areas can adapt models, policies and practices which already exist and fit them to their needs. Much good work has already been done through the beacon council scheme, by the Local Government Association and by the Improvement and Development Agency. Certainly, within our own party, the Association of Liberal Democrat Councillors has had an outstanding record of sharing best practice for several decades. We on these Benches have always believed that the key to genuine local autonomy lies in the system of local government finance. Currently, 75 per cent of local finance is centrally raised—the biggest single controlling factor on local government. It is hard to see how genuine devolution can be achieved while this is the case. We would have preferred to see the White Paper published after the Lyons review of finance, so that interlinked powers, structures and finance could have been considered together. We welcome the proposed reduction in performance indicators, and the lessening of the prescriptive best value regime. The tyranny of the target has led many local authorities to become overly focused on reporting up to Whitehall instead of out to their communities, and so needs urgent overhaul. In any event, local government has responded well to the challenge of the Gershon review, and has outperformed central government in its pursuit of efficiency gains. I suggest that local government has a lot to teach central government about that. The White Paper contains much on the problems faced by local government about which we can agree. We soon part company in our analysis of the root cause. We believe that structural, financial and administrative freedoms for local councils should be there by right, not because they have met some arbitrary target set by Whitehall. Many of the issues which concern us most, whether anti-social behaviour or contributions to climate change, have a local dimension and will respond best to solutions determined and carried out locally.