Mr Clive Betts
MP for Sheffield South East · Labour · United Kingdom
“I wholeheartedly welcome the Foreign Secretary’s statement, both its content and its tone. I would like to ask about his discussions with our colleagues and allies in other countries who are looking to implement similar sanctions.”
“I offer two congratulations: first, to my right hon. Friend and constituency neighbour, the First Secretary, on her well-deserved promotion—I am sure she will do an excellent job. Secondly, I congratulate her and the Prime Minister for their real commitment to devolution, which I have wanted to see for an awfully long time.”
“I apologise for the fact that—as I have explained to you, Madam Deputy Speaker—I will have to leave straight after my question to chair Westminster Hall. I thank my right hon. Friend for doing this very challenging piece of work. I think that the theme of fairness, for the people who need benefits and for taxpayers, is right.”
“On the other hand, so many constituents with really serious conditions get turned down for PIP, and can get it only if they struggle through the appeal system, sometimes without any help at all. So the system is not fair to anyone at present.”
“When the previous Government let the contract, we were in a situation in which procurement could not properly take account of the past record of companies, and I understand that the Government have now changed that.”
“I will dive very deeply into the question, Madam Deputy Speaker. The Chair of the Committee sends his apologies for his absence; he is presently in a Committee meeting.”
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“I want to address three fundamental unfairnesses in the settlement. The first is the lateness with which the Government made their decisions. Reference has already been made to the threshold for council tax increases. It is simply not fair for local councils to find that out when many of them had already come to their budgetary decisions. The Local Government Chronicle has just done a survey of 160 local council finance officers, 14% of whom admitted that they were basically scrambling around making changes to their budgets at the last minute in an attempt to anticipate what the threshold would be. Local authorities have a difficult job anyway, without the Government making it unnecessarily more difficult in that way. Secondly, let us look at the cuts that local government is once again facing compared with the rest of government.”
“I am in favour in the longer term of councils having the chance to raise more money at a local level rather than being dependent on Government, as an important element of localism involves freeing councils up to raise funds as well as giving them more powers.”
“Wokingham does not have the same needs as Sheffield, but in 2015-16, if we exclude the ring-fenced public health and better care fund grants that can be spent only on what they are allocated for, the spending power of Sheffield will be the same as that of Wokingham. That is impossible to justify according to anybody’s definition of fairness and reasonableness. Leeds already has less spending power and Newcastle will have less in two years. That is simply unfair. Does anyone on the Government Benches want to justify the idea that Wokingham’s spending power after 2015-16 should be higher than Sheffield’s? That is the system that Ministers are creating. As the Minister knows, I am not against bringing some incentives into the local government finance system. I understand the desire for some localisation of business rates.”
“The Minister might say that that is an incentive to build homes—that is not what the Housing Minister said last time he was asked—but in the end, that money comes from a top-slice of grant, which means that those authorities with the greatest need and the greatest amount of grant pay the most into the system in the first place, and most of them lose out in the totality of the process. Reference has already been made to my authority, Sheffield. The Minister likes to make comparisons with other areas that have not had as much grant in the past, saying that the Government are only doing a bit of evening up.”
“Within the revenue support grant is something called the council tax resource equalisation adjustment. That has been cut by 25% this year, yet it is the mechanism by which extra resources are given to the poorest areas with the most deprivation. Those areas have had the biggest cuts, with resources transferred away from them. That is how the mechanism works in practice. We can add to that the new homes bonus, which of course is not a bonus from Government, but is top-sliced from other Government funding—on the basis, therefore, of the grant that authorities already have—and then transferred to authorities according to the homes they are building.”
“I am sorry, but if the hon. Gentleman wants me to invent a grant settlement in the course of a six-minute speech, I am not going to oblige him. When the Minister appeared before the Select Committee on Communities and Local Government, he admitted a fundamental change of Government policy, away from a needs-based system. The only needs taken into account are those reflected in the baseline of business rates, which started with the new arrangement in 2013-14. The new term—the settlement funding agreement—is really composed of two parts: the business rate base and the revenue support grant. As the business rate base is held constant or increases with inflation each year, the totality of cuts that the Government make falls on the revenue support grant element of the settlement funding agreement.”
“We can then see whether we can reach some agreement to enable councils to raise more of their own resources. Finally and fundamentally, when the Government distribute money to councils they must do it in a fair way that reflects needs and deprivation. That is the element that the Government have forgotten in this settlement.”
“I said that I would take only one intervention, so my hon. Friend will have to excuse me. Other Members want to get in. The system is fundamentally broken and I support the proposals made by the LGA in its “Rewiring public services” document. Let us give local authorities a budget for a whole Parliament so that they can plan ahead and let us consider involving the LGA in the process of distributing grant. I want to go further than that. I want a fundamental review of local government finance based on three principles. First, we should give more powers and responsibilities to local authorities, building on community budgets and city deals and going further than they do. Secondly, let us consider giving councils more fiscal autonomy, as the Select Committee is in the context of fiscal devolution to cities.”
“The Minister mentioned Sheffield and fairness. Given that he is a Liberal Democrat, I should be interested to hear whether he thinks it fair for Wokingham to have the same spending power as Sheffield.”
“I will probably not be able to tempt the Minister too far down this road, but does he believe that in the longer term, initiatives such as community budgets, city deals—the Committee has been very supportive of those—the local growth fund and proposals from the London Finance Commission might together become a springboard for widespread localism and the decentralisation and devolution of powers and responsibilities to local government and local communities? Might those initiatives, of which community budgets are a key part, come together to form a brave new world—a rebirth of truly independent local government—and does he see himself as the midwife of that process?”
“I am not sure that we got a full answer to that question. What happens to the programme in 2016? Is the intention to roll it on? If so, what will happen to families who have been successfully dealt with by the programme and ticked off, for whom the payments have been made? Will there be any sort of follow-up system to monitor those families and ensure that they do not slip back into difficulty? The Select Committee also asked about sanctions via the payment-by-results system for authorities that had not delivered. The Government response stated that there had not yet been any sanctions. Will the Minister update us on that?”
“These are our budgets and we’re going to spend them as we want.” Despite the helpful responses to a number of the recommendations in our report, not much was said about the need for pump-priming and whether there needed to be a systematic cross-Whitehall basis for incentivising this process. I shall say a few words about the troubled families programme. The Select Committee was supportive of that and we could see what the Government were achieving. It might be helpful, as I have said previously, to have an update on what progress has been made. We welcomed the expansion of the programme, with 400,000 extra families being brought into it, but questioned whether the increase in the number of families being dealt with was being matched by a proportionate increase in the resources made available.”
“Indeed, we talked about all Departments, not just the Department for Communities and Local Government, recognising that and about having a cross-Whitehall system for incentivising that process—perhaps a top-slice of departmental budgets. I think that Lord Heseltine suggested that in his “No Stone Unturned” report when he talked about nearly £50 billion being put into local growth funds. In the end, we got £2 billion from Government —slightly less than Lord Heseltine had mentioned. One of the rumours that went round—I do not always believe rumours, but my sense is that there might be some truth in this one—was that Departments were simply pulling up the drawbridge and saying, “We’re not going to give any of our budgets up to this process.”
“Local authorities can put a lot of work into youth services, but the costs are saved in the justice system. Very often, of course, central Government make the savings and local government spends the money. The Government talked about the transformation network working to develop locally based investment agreements, but the Committee said—the Government did not really respond to this—that we thought that Departments would have to provide some money up front if they were to benefit down the line. There was not really a clear indication that that message had got across and that the Government recognised that if community budgets were to work—if we were to roll them out—they would have to do some pump-priming.”
“We drew attention to the fact that if the budgets were to work in the long term, a different approach to long-term funding would be needed. We had a response from the Government on that in two different places. They said that “the Treasury will work with departments to give local public services the same long-term indicative budgets as departments from the next Spending Review”. That is a fundamentally important statement and one that the Minister might like to say a little more about. If the Government are serious about that, it could fundamentally change the financial relationship between central and local government, and we would like to hear more. We identified the problem that the body that makes the savings under community budgets may not be the body that spends the money.”
“However, there was recognition, I think, that if we move to pooled budgets, which I think the Government were saying was still a little way away, we would need to have a fresh look at the whole question of accountability, given that pooling local authority resources with local police resources and Department of Health resources will involve dealing with all the different systems of accountability for that spending. We have asked the Public Accounts Committee to have a look at this. Given that the Government have recognised that a fresh look will be needed at some point, can the Minister enlighten us on his vision of how a new system of accountability would work? Finally on community budgets, there is the issue of wider financial concerns.”
“There is a brief reference to the Cabinet Office exploring whether legislation might be needed, whether the problems of data sharing are not just about cultural barriers and perceptions about what the position might be, and whether there could be some real legal obstacles to data sharing. If that is the case, can the Minister update us on what progress the Cabinet Office has made with regard to data sharing? Financial accountability is also very important. The Government response was very much that, as we integrate services in a more specific way across a number of different initiatives, the existing system of accountability will be satisfactory.”
“The Secretary of State was quite open in saying to the Committee that he thought that, very often, there were no real legal obstacles to data and information sharing; there was just a presumption that people could not do it. It was more a matter of culture and belief than a real obstacle, so the development of the network of What Works centres, the work of the transformation network and the efforts to get local authorities and central Government Departments to set up a centre of excellence for information and data sharing are all very welcome, because they do seem to show the Government taking this matter very seriously. There is also the Treasury technical advisory group and its role in exerting pressure to ensure that those barriers are removed where they exist.”
“When Baroness Hanham gave evidence to the Committee, we noted the honesty with which she said, “These two Departments”—CLG and Health—“have different cultures and information systems, and there are real challenges and problems in breaking those barriers down and getting proper and full co-operation.” In their response, the Government pointed out that to access the money available through the better care fund, there had to be clear indications at local level that data and information sharing had been properly addressed. As we approach the beginning of the next financial year, does the Minister have any information on whether progress has been made? I was pleased that the Government seemed to recognise that data and information sharing is a potential problem.”
“On the better care fund, do we have evidence that the NHS trusts really mean to co-operate to make things happen, or will they sit there and say, “This is health money. We want to spend it in a way that we direct”? That leads me on to data and information sharing. I remember when the Select Committee did our inquiry into the transfer of public health to local government. We were very supportive, considering it to be one of the very positive localist things that the Government had done.”
“Despite my little aside about the Secretary of State a few minutes ago, I accept that Ministers in that Department want this to work, but I am not always sure that all their colleagues or, indeed, all the civil servants in other Departments necessarily want it to work. Joining up social care and health offers a way forward to better, more integrated services. That will not necessarily involve the full whole-place approach, but it is a very important area. The Government mentioned in their response the better care fund and the important role that health and wellbeing boards will have to play in trying to join up and integrate services. Do we see any evidence in delivery on the ground that the health and wellbeing boards and the new public health role of local government are starting to shift the approach from reactive to proactive?”
“We raised that issue with the Secretary of State for Communities and Local Government when he gave evidence and, to be fair, he said, “I’m not aware of this, but I will go back and look into it,” and we had a very long response from the Government on this point. What they did not do was answer the following questions. Has BIS reformed? Has the brick wall been knocked down? Is BIS now co-operating properly? That is what we want it to do. It is one thing to list a load of initiatives; it is another thing to say, “Is that Department really signed up to the process, or is it going through the motions?” Community budgets will not work in the end unless there is real enthusiasm, and not merely within the Department for Communities and Local Government.”
“Economic growth is a key issue in relation to community budgets. We can see community budgets, together with the city deal arrangements and the local growth fund, unlocking the potential for real, clear public service transformation to promote economic growth at local level. A key element, in addition to improved public services, is the idea of being able to work positively at local level to deliver higher economic growth. The Select Committee will look at that when we look at the work of the London Finance Commission and its recommendations. Very clearly in our report, we drew attention to the comments that Essex county council made to the effect that in trying to work with the Department for Business, Innovation and Skills, it had simply hit a brick wall: BIS was not willing to co-operate.”
“I cannot help but throw in a little one by saying that the Department for Communities and Local Government should be taking the lead, but when the Secretary of State starts to direct authorities on how often they should empty their bins—he will say that he does not direct, so let us say encourage or persuade them, or comment on how they should do it—or tell them how they should deal with their parking arrangements, that does not create the best of atmospheres and is not the best way to promote letting go and allowing local officials to engage at local level with local authorities and to respond to local needs. Is not it really the job of the Department for Communities and Local Government to take the lead in a very positive, localist way and to help other Departments to roll out best practice?”
“Will we have any more pilots like the whole-place pilots or the neighbourhood pilots, or will there just be a more diffuse dissemination of the principles of community budgets? Co-production is important. Community budgets clearly have financial incentives to make savings and deliver better services for the same money. It is an important catalyst for pushing service providers to better and more integrated working relationships, but if that is to happen, central Government Departments must let go and give their officials at local level the freedom to engage properly with local authorities and deliver things in different ways in different parts of the country.”
“I presume that those account managers are very much the sort of named officer or official that the Committee asked for—someone in a Department with the responsibility to help make the scheme work and to whom local authorities could go if they found barriers being put up. I have a few questions about the transformation network, because it appears in many of the Government’s responses. What precisely is it? What staff are involved in it, and how many? What is its budget, and to whom is it accountable? Those are important questions to answer if we are to understand how it works. There is also a reference to its dealing with 22% of service provision across the country; what happens to the other 78%? How will it be dealt with? That seems fairly fundamental if we are looking for a national roll-out.”
“We accepted in our report that the idea of secondments could not be rolled out to every part of the country—that probably is not feasible—but we asked for at least a named official in each Department to whom local authorities could go if they were experiencing problems, delays or barriers, for help finding a way through those obstacles. The Government response discussed the public service transformation network established as a way to deal with that issue: its role in disseminating lessons learned from the pilots, its help with plans to transform services in different parts of the country, and the appointment within it of account managers.”
“Essentially, it is about encouraging service transformation, if not through formal roll-out of more measures that we would immediately recognise as whole-place community budgets. What does a successful roll-out of the principles actually look like in practice? How will they be embodied in the delivery of services in our communities throughout the country? Central Government support for the process is clearly key, because much of what we want is about central Government services delivered locally, in a more joined-up way, and by working in conjunction with local authorities, police and other local services. We recognise that secondments have been important in the pilots to breaking down the barriers that had often existed in Departments and finding a way in to those Departments to make them respond more positively.”
“On specific matters, the Committee could see merit in having more pilots, but ultimately we wanted a nationwide roll-out of community budgets. We thought that that was important and that they have that much potential. We want them to happen everywhere. The Government response supported increased integrated delivery and gave a lot of examples of initiatives and freedoms given to local authorities, such as the reforms of the housing revenue account, which are not directly linked to community budgets but illustrated the resulting freedoms that authorities could have—particularly if the cap were taken off borrowing, but I make that point in passing before moving on to issues more relevant to the report—and other forms of assistance that the Government will give to help the principal approach of community budgets spread more widely.”
“We had a few concerns about the future—the additional families coming on stream in 2016 and what will happen thereafter. Generally, the Government response was positive and recognised the need for a wider roll-out of the principles behind community budgets—strong leadership, support systems and accountability mechanisms—but it used some new vocabulary that we had to deal with. Something called the transformation network was referred to many times, and we are interested to find out more about that organisation, body or network, as it seems key to how the Government intend to take the scheme forward. Another interesting organisation was the Treasury technical advisory group, undoubtedly lurking somewhere in the Treasury across the road, which will be important in helping move the scheme forward.”
“Will the leadership naturally be as strong, and will it be the right sort of leadership, in other areas as the scheme is rolled out across the country? We acknowledge that there are barriers, often cultural barriers, particularly in Whitehall, and the important role that secondees from Departments have played in helping to break them down. We recognise the need for a clear framework, so that the costs incurred and the benefits, which do not always come to the same organisations, are clearly identified and systems for accountability are in place. On the troubled families programme, about which I will say a few more words at the end of my comments, we recognise generally that progress has been made. The Minister might like to update us further on the present position and how many families the programme is now dealing with.”
“I flag up the fact that the Committee is now considering the London Finance Commission and its recommendations for financial devolution to cities. Maybe that is another element that will come into the devolutionary equation in due course. To summarise the Committee’s findings, we felt that the pilots demonstrated a clear potential for delivering cheaper yet more integrated services that are better related to the specific needs of both areas and individuals living in those areas. We recognised that to be successful, they need strong leadership at the local level and from central Government. We had one little worry: pilots tend to be in areas where individuals are committed to making something happen, and strong leadership tends to go with that.”
“I will briefly sketch the Committee’s overall view and then put some specific questions about remaining issues of concern, some of which were raised in the report and some of which the Government might not have answered as fully as we would have liked. I appreciate that I might ask a lot of specific questions; if the Minister feels that some of them are more appropriately responded to in writing after the debate, I understand. Community budgets are not matters of great political contention. It is merely a matter of exploring how we can make the ideas work in practice, considering the obstacles to the successful further development of the community budget approach, learning lessons from what has happened on the pilots, and seeing how community budgets can relate to and work more widely with local growth funds and city deals.”
“It is a pleasure to serve under your chairmanship, Mr Sheridan, and to introduce this debate on the third report this Session by the Select Committee on Communities and Local Government, on community budgets, an important subject. To set the context, the Committee supports the concept of community budgets and how they work in practice where pilots have been established. It is fair to say that, as well as supporting what has been done on community budgets, the Government were generally supportive of the Committee’s recommendations. We all saw the potential, in this economically difficult climate, both to save money and to improve services. Not many initiatives have the opportunity or potential to do both.”
“I welcomed the Treasury’s looking at whether it can give local authorities more of an indication on medium-term budgeting than they currently have. As part of that process, will it also be the Treasury’s job to look at how far, during the spending review period, Departments will be expected to contribute a certain part of their budget to the community budget process?”
“The Minister is right to say that the Select Committee drew particular attention to the Essex problem—or the BIS problem, as it should probably be called. He has given a long list of things that Essex has been able to do, but the people from the Essex pilot were clearly concerned when they came to give evidence to the Committee. Will he take the Committee into his confidence and indicate precisely what BIS did when those points were put to it? How did BIS respond? What commitments has BIS given to change?”
“Friend the Member for Corby has already partly pre-empted. This is the final comment of our report: “Without quickly and fundamentally changing the way in which services are delivered by increasing local autonomy and integrating services so as to reduce demand and dependency, the reductions that are made to public spending on local services may simply result in more spending in the future on welfare, and judicial and emergency health interventions.” That says it all. It is why the community budget process is so important and why we need it to be rolled out across the country as soon as possible.”
“To develop the approach across the country, we welcome the development of more pilots, but we want to see a clear plan for how the community budget approach could be rolled out across the country. I am not sure that I heard that from the Minister. Where does he think we will be in five years’ time? How will we get to a situation in which the approach can be rolled out across the country in that period of time? I do not think that five years is too optimistic a target. I re-emphasise the point that local government is up for and wants community budgets. The Minister and his colleagues in the Department are entirely supportive of community budgets, but if they are to work the whole Government and all Departments need to be involved. There are still one or two question marks about that. I will finish with a quote that my hon.”
“I thank the Minister and the shadow Minister, my hon. Friend the Member for Corby (Andy Sawford), for their responses to the report. We have had a good, positive debate with a lot of agreement. I said at the beginning that the Minister would probably not have time to respond to all the questions that I raised. I am sure he will write to me afterwards so that I can share his responses with the Committee. The report was supported by the whole Committee, as our reports generally are. There is clear agreement that, through the community budget process, the available money can be spent better. Perhaps more importantly, the individuals who receive services will get a better deal. They will get more joined-up and integrated services and less waste and confusion.”
“Both the National Audit Office and the Local Government Association have expressed concerns that unless there is a change of policy, some councils are simply not going to be able to make ends meet over the next two or three years. The Government have powers under section 31 of the Local Government Act 2003 to help councils in that situation, but Ministers have also pointed out that there is potential to use a referendum to increase council tax. Who would vote for an increase in council tax in such circumstances unless the Government make it absolutely clear in advance the criteria under which they will use section 31 powers? Can the Minister tell us what they will be?”
“Given that the Help to Buy scheme is such a major plank of Government housing policy, does my right hon. Friend not think that the Government should have made a detailed assessment of its likely impact on house building and house prices before introducing it? When the Treasury Select Committee asked officials from the Department for Communities and Local Government about that in November, they said that it was not a matter for them; they said it was a matter for the Treasury. When asked whether any officials at DCLG had had any discussions with Treasury officials about the impact of the scheme, they said no. Is not that a complete dereliction of duty on the part of DCLG with regard to this important policy?”
“The Secretary of State will remember his visit to the Select Committee just after the Government were formed. I asked the then Housing Minister, the right hon. Member for Welwyn Hatfield (Grant Shapps), whether success for the Government, when they are eventually judged on their record, “will be building more homes per year than were being built prior to the recession, and that failure will be building less.” The right hon. Gentleman said: “Yes. Building more homes is the gold standard on which we shall be judged.” My right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) has just said that we were building more than 200,000 homes a year before the recession. When will the Government hit their own targets and hit that figure?”
“As some of my colleagues have said, that is not a terribly hard standard to meet, because the Labour Government did not build enough homes. We built more homes than this Government are building, but we did not build enough. We had a brilliant record on the decent homes programme and on putting right the wrongs of the underinvestment of the previous Tory Government, who allowed the stock to deteriorate, but we did not build enough homes.”
“If people listened to Government Members, they would not think there was a housing crisis in this country—but there is, because there are people who come to my surgery who cannot get a home to live in or who cannot get a home that they need. They cannot afford the rising prices or the rising rents. That is this country’s housing crisis. I challenge the Secretary of State with the comments made by his then Housing Minister to the Communities and Local Government Committee three years ago, when he said that the “gold standard” on which the Government would be judged was building more homes than were being built before the recession. The Government have been building about half the number of homes that were built before the recession. However they choose to dress up the figures, they have failed by their own standards.”
“They could go to see how people in the Netherlands, often with the involvement of small builders, are building their own homes—the homes they want, because they have designed them—at about 80% of the cost of a house bought from a private developer. That could be another element. There is no one silver bullet, but the report includes several measures which, if the Government implemented them straight away, would help to remove the immediate problems of the housing crisis and set us in the right direction.”
“We could look at the housing grant paid to housing associations, which lies on their books as a debt. If it was released tomorrow and that grant was written off—again, there would be no cost to the Treasury, because it has already been paid out—we could free up housing associations’ ability to borrow and build more homes as well. We could look at self-build, which is the hidden element in a potential housing renewal. The Government could go to see what has been done in the Netherlands, where there is not so much self-building as self-constructing, which involves getting local authorities to lay out sites and getting planners involved on a simple basis.”
“I want to refer to my Select Committee’s 2012 report on “Financing of new housing supply”, in which we considered and proposed the idea of a housing bank, with guarantees for institutional investment to go into the social housing and private housing sectors. I recognise that the Government have gone a little way towards that, but not sufficiently. That has been done in the Netherlands; why can we not do it here? Instead of giving guarantees for mortgages, let us put them into building homes. We could take the cap off local authority borrowing, and 60,000 homes could be built immediately. I think that that has cross-party support in the House, so why do the Government not do that? It would not cost any more taxpayers’ money, and it could be done instantly.”
“We must all recognise that: if this is a crisis that is a priority for us to deal with, some public expenditure will have to go in as well. I hope that we can get to a general situation in which we recognise that to achieve the stabilisation of house prices and rents, as has happened in Germany, housing supply has to meet housing demand in the long term. To achieve that will require the sort of cross-party agreement that we had in the 1960s and 1970s, when successive Governments of different political persuasions built the homes that the country needed. I hope that we can get back to such a situation.”
“That is a good commitment, but I want to see it go further in the longer term: we must get to 250,000 to get demand and supply back in sync. The reality is that the construction industry in this country is now in such a mess that it could not respond more quickly to a higher target: prices of bricks and labour are already going up in the industry, because it has got down to such a low level. It is therefore realistic to set that target. The issue is that the private sector in this country, as has already been said, has never built consistently more than 150,000 homes. If we are to get up to a figure of 200,000, a large part of that must come from the social housing sector, from local authorities and housing associations. To enable that to happen, we will have to spend some public money.”
“Absolutely, and that brought great delight to many tenants up and down the country. The Government can pray in aid the fact that with the fallout from the banking crisis the private housing sector in this country suffered a decline in demand, but they compounded the problem by cutting the social housing budget by 60%. The right hon. Member for Hazel Grove (Sir Andrew Stunell) was at that time a Minister in the Government who allowed that to happen, and he should stand up and apologise for it. The reality is that the cut was 60%. Government expenditure as a whole was cut by 20%, but social housing capital expenditure was singled out for the biggest cut of all major Government programmes, which has compounded the problem. I welcome the Labour leadership’s commitment to move towards building 200,000 homes in this country by 2020.”