Levelling-up and Regeneration Bill

Baroness Taylor of Stevenage Excerpts

Committee stage
Wednesday 15th March 2023 Lords Chamber

I cannot go back to 1906 or whatever the date was—1974, I think. I go back to only 1979 so I am quite young in this, but I did manage to fit in 11 years on a district council, 10 years on a county council and then eight years on a metropolitan borough, so I have a well-scarred back. If you get partnership and ownership, you can get joint endeavours and you success. If you get alienation, that is a recipe for failure. If you leave district councils out of the equation—if you make them subsidiary, just adjuncts to CCAs—I would not be surprised if, at least in some places, their co-operation was significantly less than it would be if they were active and valued partners of the CCA. I say that to the Minister because, sometimes, politics has to give way to human nature or at least has to recognise the existence of human nature, and if district councils are spurned, they are going to be less helpful and co-operative. He may say, “We’ll soon deal with that”, but that is not a recipe for success. All I say to him is that he should please give serious consideration to what the noble Lord, Lord Hunt, said, because he is giving the Government an avenue—a gateway—to unleash that co-operation between the two tiers of local government so that CCAs in fact prosper.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I am very grateful to my noble friend Lord Hunt for tabling the amendment. I take this opportunity to congratulate him on his 50 years in local government and the noble Lord, Lord Stunell, on his many years in local government. I went into local government in 1997. I was leader of my council for nearly 17 years before I joined your Lordships’ House, so I am the baby of the party here. However, I learned a few things along the way, as the noble Lord, Lord Jackson, kindly remarked. I want to cover some comments about my noble friend Lord Hunt’s amendment and to make some general points about the role of district councils in the new world that we are looking at following the Bill.

The big question here was asked by the noble Lord, Lord Mann, which is: where does democracy lie? This is a very important question. We think about it often in local councils. In previous sittings, we have heard set out clearly before your Lordships’ House the incredibly valuable role that district councils play in many of our communities in the UK, and I am grateful that this has been brought before us once again today. That is why it is so disappointing that the Bill, which purports to be all about devolution and bringing decision-making closer to people, seems to ride roughshod over the very tier of local government and the 183 councils that are closest to many people and communities. District councils outstrip county council colleagues and national government by a very long way indeed on issues such as helping people feel proud of their area, tackling social issues in our neighbourhoods, responding to and dealing with emergencies and, importantly, bringing the views of local people into decision-making in their local area. The figures are 62% for the district councils, 32% for county councils and 6%—yes, just 6%—for national government. As my noble friend Lord Hunt said, district councils cover about 40% of the UK’s population but, importantly for the purposes of the Bill, they cover 68% of the land of the UK.

In this country we already have the lowest number of elected representatives per head in Europe; France has 35,000 communes with mayors and Germany has 11,000 municipalities. It is the UK that has abnormal levels of underrepresentation, and our councillors lack the powers and finances of many of our continental counterparts. Across the country we have around 2,000 electors per district councillor, which may account for their approachability, whereas there are 9,000 electors per county councillor.

They also represent communities that people recognise —I think this is key for the Bill. The comments by the noble Lord, Lord Mann, were very important here; people relate to the communities represented by our district councils. Surely the Bill should aim to keep the devolution we already have, not snatch it away to bigger and bigger combined authorities. That does not sound like progress to me.

This is not to set up any false conflict or rivalry between counties and districts. We all have a job to do and county councils are currently doing a valiant job in very trying circumstances. But with the high-cost services at county level, such as adult care services and children’s services, impacting on around just 5% of the population, whereas district council services impact on 100% of the population, it is perhaps not surprising to see how valued district councils are by their communities. As well as environmental services like the ones that my noble friend Lord Hunt commented on—waste collection, fly-tipping, street cleaning, licensing and food safety—districts look after leisure, parks and culture. They often take a role in preventive public health initiatives—in my own borough we have a Young People’s Healthy Hub tackling mental health issues for young people—town centre and high street management, tourism and so on. They also deal with key strategic services. I take issue with the noble Lord, Lord Jackson, on this, because without key strategic services such as planning and economic development, there would be no levelling up. Leveraging £1 billion of town centre investment, as we have done in my borough, and £5 billion for a cell and gene therapy park—these are important contributions to the local area.

The noble Lord, Lord Mann, referred to neighbourhood planning, which is a key part of how we drive forward issues around housing. It is well documented that it is neighbourhood planning that has actually delivered housing; it is a very important part of what has been done. The noble Lord, Lord Stunell, referred to issues around the structure and architecture of the national development management policies. Frankly, I do not understand how this is going to work in the way it is currently set out in the Bill.

There are plenty of other contributions that district councils make. It was alarming to hear the Minister contend in our earlier session this week that

“councils do not deliver any of the services required by the PCC.”—[Official Report, 13/3/23; col. 1143.]

That does not take into account the very successful partnership working between district councils and the police. As well as managing CCTV systems and often funding neighbourhood wardens, districts have extensive programs for tackling anti-social behaviour and for drug and alcohol rehabilitation, and are often linked with Housing First provision, domestic abuse, engaging communities in setting local policing priorities and tackling enforcement issues in licensing, fly-tipping and environmental crime, to name but a few. During the pandemic, in two-tier areas it was often district councils that stepped up to either take on the support of those who were shielding or help mobilise hyperlocal resources to do so.

Forgive me for perhaps labouring the point a little, but the premise of the Bill, which seeks to override the very important role that district councils play in our communities, may be based on a misunderstanding or an outdated view of what district councils actually do. Of course, on planning issues, when we are looking at big strategic planning, districts have to work in partnership with other bodies—the health service, local enterprise partnerships and county councils—but I contend that this means they must have a vote and a voice around that table. Therefore, I support my noble friend Lord Hunt’s amendment in this group, as I have with others in earlier sessions that give district councils—and indeed town and parish councils—the voice that they deserve and that their communities expect them to have.

[Earl Howe (Con)]

My Lords, Amendment 125A tabled by the noble Lord, Lord Hunt of Kings Heath, brings us back to a set of issues that we have discussed in a number of our earlier debates: the question of which authorities can prepare a proposal for the establishment of a combined county authority and submit the proposal to the Secretary of State. The amendment seeks to add second-tier district councils within the proposed CCA’s area to this list of authorities. However, as the noble Lord is aware, the Bill provides that only upper-tier local authorities—county councils and unitary councils—can be constituent members of a CCA. District councils cannot be constituent members of a CCA and, as such, cannot prepare and submit a proposal for a CCA.

Let me take the Committee through the rationale for this approach. When CCAs come into being, they will ensure that there is a mechanism for strategic decision-making across a functional economic area or whole-county geography; in other words, co-operation over matters for which upper-tier local authorities already have responsibility.

In the Government’s view, therefore, it makes sense to enable upper-tier local authorities to decide, albeit following appropriate consultation, whether a CCA across a wider geographic area might offer advantages for such whole-county strategic decision-making. That is not to say that district councils should have no voice in the way a CCA comes into being; quite the contrary. While we believe that it is right for district councils not to form part of the constituent membership of a CCA, they are nevertheless key stakeholders in the devolution process. As we stated in the levelling up White Paper, while we will negotiate devolution deals with upper-tier local authorities across a functional economic area or whole-county geography, we expect county councils to work closely with the district councils in their area during the formulation of the proposal and subsequently. This is exactly what has been happening to date, and we have been pleased to see it.

How can we ensure that the voice of district councils is heard as a CCA proposal is being put together? As discussed in Committee previously, authorities proposing a CCA must undertake a public consultation on the proposal. As key local stakeholders, district councils would be consulted. Their views would be reflected in any summary of consultation responses submitted to the Secretary of State for consideration.

The task of the Secretary of State is then to assess whether the consultation has been sufficient. In doing so, the Secretary of State will have regard to whether it reflects the views of a full range of local stakeholders, including district councils should there be any. The Cabinet Office principles for public consultations are very clear that those conducting a public consultation must consult the full range of local stakeholders, not simply local residents but businesses, public authorities, voluntary sector organisations and others with a legitimate interest. If the Secretary of State, mindful of those principles and in the light of the evidence presented, deems the consultation not to be adequate, they themselves must consult on the proposal. Any such consultation would include consulting district councils.

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Earl for giving way. I do not accept the principle that the district councils in an area, which are the democratically elected representatives for their people, are the same as all the other stakeholders that the noble Earl referred to and just another consultee in this process. Fundamentally, that is where the discussions we have had on this so far have given us such a deal of trouble. District councils have an elected mandate from the people they represent. I appreciate that there are very strong rules around Cabinet Office consultations and so on in the principles that the noble Earl has set out, but surely there must be a different approach to district councils because of the elected mandate that their representatives hold.

--- Later in debate ---

[Baroness Pinnock (LD)]

My Lords, I thank my noble friends Lord Scriven and Lord Shipley for raising this important part of the levelling-up agenda. I of course also thank the noble Lord, Lord Young of Cookham, for linking it to the estimable White Paper on levelling up which, in many ways, has pointed to the importance of full devolution being equated with autonomy over local funding.

At the moment—I have probably said this before in the Chamber—we have the delegation of powers and funding from the centre to local government, be it combined authorities or local councils. This is therefore an important debate because, if we really want to be on the path to devolution, we have to address the issue of more autonomy and fiscal powers for local government.

The Minister may wish to pause at this point and take time over the weekend to refer to a House of Commons report that called for more autonomy and fiscal powers for local government. To be fair, it is 10 years old but sometimes, these big changes take a long time. It was published by the Political and Constitutional Reform Committee, which was of course all-party. I draw the Minister’s attention to two elements of the conclusion, and I hope she will then have time to read more of it:

“Power and finance must go together if local government is to become an equal partner… any attempt to make the relationship between central and local government more balanced would be meaningless without giving local government its own source of revenue… to achieve fully the potential of localism, a key plank of the Government’s policy platform, local government requires financial freedoms.”


The report stated that the Government, under the same political colours as now, should consider giving local authorities in England a share of the existing income tax for England. The committee did not propose a change in income tax rates, but:

“The concept of tax transparency would allow local people to see more clearly what their taxes pay for locally and encourage them to hold local councils to account for their expenditure.”


I agree. There is obviously much more in that report.

The debate here is about having real devolution. If Scotland, Wales and Northern Ireland can have it, why not Yorkshire, the population of which is bigger than each of them?

[Baroness Taylor of Stevenage (Lab)]

Why not Hertfordshire, with a population of 1.2 million people? I join the noble Baroness, Lady Pinnock, in thanking the noble Lord, Lord Young, for drawing us back to the White Paper and the ambition contained therein. One of the key themes of discussion on the Levelling-Up and Regeneration Bill so far has been the missed opportunity to tackle some of the critical financial issues that, in my view, are holding local government back from playing as full a part as it can in delivering the Bill’s stated agenda and missions. There is a significant lack of ambition in not taking this further, described by the noble Lord, Lord Shipley, as the elephant in the room. The noble Lords, Lord Scriven and Lord Shipley, rightly highlighted that a key aspect of this is the extent to which the Government seek to reduce the current chronic overcentralisation of decision-making in the UK by empowering CCAs with enhanced fiscal powers. A great deal more could be done in that regard.

In the probing and thoughtful report referred to by the noble Baroness, Lady Bennett, the LGA carried out a comparative study of fiscal devolution in the UK, Holland, Germany and Switzerland. It concluded that the UK should be working with local government to explore the full extent of fiscal devolution and what it could add to ensure that authorities have the strongest financial muscle to deliver what they know their areas most need. Commenting on the Netherlands, for example, the report says that

“fiscal freedom means that the broad suite of local taxes available to Dutch municipalities, and their tendency to collaborate cross borders, gives local government more placemaking levers while also providing residents with greater transparency on council finances. Fiscal freedom means a difference between money for core services and for place-specific social and cultural issues. It does not argue for fiscal autonomy with the idea that local government can become fiscally self-sustaining units of tax and spend but focuses on the potential that revenue-raising could have for placemaking.”

That goes right to the heart of this argument.

Even with the so-called trail-blazer authorities in Manchester and the West Midlands, one often gets the impression that achieving the fiscal freedoms they feel they need to serve their communities is like getting blood out of a stone. In previous sessions we commented frequently on the regressive, unhelpful and expensive method of creating multiple funding pots that means councils have to waste their precious funds pulling bids together.

If the amendment proposed by the noble Lords, Lord Scriven and Lord Shipley, were adopted, or something very similar to it, it would set into legislation the devolution of fiscal powers that, in my view, should always have been in the Bill. On Budget Day, it is important to say that no one in local government believes that a magic money tree is coming our way. I quote the LGA report again:

“Fiscal devolution entails the same suite of local taxes as we currently have in the UK, except with a higher level of devolution of central taxes. Unlike with fiscal freedom, this would not necessitate the introduction of ‘new’ taxes, but rather a reconsideration of the obligations and duties of each level of government. If fiscal devolution deals were done on the basis of local need for finance, following this German model would mean local authorities could fund their own care services in line with their own requirements.”


Europe also benefits from federalised banking institutions. How much more ambitious could local government be if that were the case here?

The noble Lord, Lord Shipley, referred to all finance being controlled from London. I am pleased to say that, in Wales, the Labour Government have already developed this and are making great strides in developing local banking institutions. Incidentally, Wales is also undertaking a comprehensive review of council tax.

Earlier this week a Question was asked in your Lordships’ House on the huge potential of pension funds in contributing to fiscal devolution. The noble Lord, Lord Scriven, spoke about the extent to which local government and local decision-making is controlled by national finance, with council tax set by Parliament, business rates set by the Treasury and even rents set by DLUHC. That does not make any sense. It is a nonsense, as the noble Lord, Lord Scriven, said, to end up needing a pothole fund. When that announcement was made earlier today in the Budget, my first comment was, “Why don’t you fund local government properly? Then we could fix our own potholes.”

These revenue-raising powers are important to local government. The noble Lord, Lord Young of Cookham, rightly pointed at self-sufficient, independent and confident local government, and finding ways of delivering that through a different fiscal settlement. That is really important. We are not a federal state, as the noble Lord, Lord Jackson, said, but surely an aim of the Bill must be to create the kind of state where we can have a much more effective system of fiscal devolution, with local government having the freedoms to fund itself properly.

[Lord Jackson of Peterborough (Con)]

The noble Baroness is making a very good point, but she will no doubt agree with me that sometimes things go wrong— for instance in the recent experiences in Slough and Thurrock —with inappropriate spending or error. In the absence of the Audit Commission, which I remind noble Lords on the Liberal Democrat Benches was abolished under the coalition Government, surely there must be some sanction at central government for inappropriate expenditure. It may be just incompetence, and not even at a criminal level. In the absence of an equivalent to the National Audit Office for local government, there must be ways for Ministers to exercise discretion on financial issues in local government on behalf of taxpayers.

[Baroness Taylor of Stevenage (Lab)]

I do not disagree that audit is required. We debated that earlier on the Bill. The authorities mentioned are Conservative authorities, as in Northampton, where my good friends in Corby lost their council because of the actions of a council of another political persuasion. That is a political point, which I probably should not make here.

A proper consideration of the role of further fiscal powers, with full engagement of local government— I am not suggesting that this is done to us because it would go against all the principles that we are talking about—could provide the basis for an empowered, innovative and dynamic shift for CCAs and their constituent members, sitting alongside the completion of the fair funding review, which has been outstanding for years now and which we have discussed previously.

[Baroness Scott of Bybrook (Con)]

My Lords, Amendment 128 tabled by the noble Lords, Lord Scriven and Lord Shipley, relates to the potential fiscal powers of combined county authorities, although we were slowly moving into a debate on English devolution, which we should leave for another time.

As set out in the levelling-up White Paper, level 3 devolution deal areas can look to finance local initiatives for residents and businesses. These include regeneration through a mayoral precept on council tax, and supplements on business rates. The Government are already considering putting powers in the hands of local people through greater fiscal freedoms and are exploring this further fiscal devolution, initially through the trail-blazer devolution deals with Greater Manchester and the West Midlands combined authorities. Negotiations are ongoing and progressing well. It says in my notes that they are expected to conclude in early 2023, so I assume that it will be very soon.

--- Later in debate ---

[Lord Stunell (LD)]

My Lords, we have had a short debate and it will be very interesting to see how the Government respond to it. I wait in hope that something can be done, as my noble friend said in moving this amendment, to turbocharge local democracy. There is no doubt that it needs turbocharging: we see elements of its alienation every day of the week. We are moving closer and closer not to better local democracy, but to perhaps better but certainly more intense local administration. I have spoken on that already today. My noble friend made the extremely powerful point, and certainly a very good debating point, that if ID cards are good enough for Northern Ireland, surely a proportional voting system is good enough for England. I hope the Government have a really plausible reason for not accepting that argument.

My noble friend Lady Harris has accurately reported, I am sure, the views of Richmondshire District Council—incidentally, it is in North Yorkshire, which we were of course discussing earlier today—and the value of every vote being equal and the opportunities for regeneration that flow from that. The noble Baroness, Lady Bennett of Manor Castle, drew our attention to some examples of bad practice and pointed out the damaging impacts of single-party rule. Since we certainly think it is inappropriate, to say the least, in North Korea, it ought to be inappropriate in our town halls in England as well. Restoring that element of local choice and broader representation ought surely to be one of the objectives of this levelling-up Bill.

My noble friend Lord Foster of Bath drew attention to the not untypical situation with East Suffolk Council whereby a party with less than 40% of the vote finishes up with over 70% of the representation and therefore of the decision-making. We had debates earlier about the Government’s intention, set out clearly in the Bill, to suspend the operation of proportionality in local authorities in the formation of CCAs. I hope the Government Front Bench will take note of some of the malign consequences that can arise when proportionality is not adhered to. Of course, in terms of representation, a sense of alienation can grow in voters, and in non-voters but electors, who repeatedly say, “It’s not worth voting because they always get in”. That happens time and again, particularly in local government. Surely, we have to make sure that the voices of the silent ones—the voices being suppressed by that system—are in fact heard.

I want to hear the Government say, “There are things about this we do not like; we do not really want anything other than first past the post; but we do recognise that local communities, local councils, should have the right to choose for themselves the voting system they use”. My noble friend has set out in considerable detail a very compelling case: we are not suggesting throwing the whole system up in the air, but simply using systems already in operation in various parts of the United Kingdom, including in England.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I am grateful to all noble Lords who have contributed to the debate, including the noble Baronesses, Lady Harris, Lady Pinnock and Lady Bennett, and the noble Lords, Lord Foster and Lord Stunell. It has been a very interesting discussion. The arguments I have heard articulated many times over the years on voting methods have been rehearsed with great conviction this afternoon.