Oral Answers to Questions
Debate between Lord Blunkett and Lord Stunell
Andrew Stunell
The figures announced yesterday were in relation to a base that was set by the outgoing Labour Government. I do not know whether that is the complete answer my hon. Friend wants, but I am happy to write to him further if he needs me to.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
PricewaterhouseCoopers estimates that on the back of the cuts announced yesterday, 82,000 jobs will go in Yorkshire. Could the Minister describe the mechanism to avoid a further double whammy for the city of Sheffield—its individuals, businesses and communities—from the 26% reduction in the overall grant to the city over the next four years and the 18% reduction in the area-based grant, which is theoretically being un-ring-fenced, but which will actually not exist at all unless there is a mechanism to retain it in the communities that were receiving it?
Local Government Financing
Debate between Lord Blunkett and Lord Stunell
Andrew Stunell
I will give way in a moment, but let us be clear that for every £300 of income we are getting, we are spending £400 and putting the extra £100 on the credit card; £156 billion is going on the card this year, adding to £1,400,000 billion of debt. Putting that right does not guarantee recovery, but failing to put it right guarantees failure of the British economy.
No local authority will face a reduction in its revenue grant of more than 2%, where councils have received final allocations. I want to nail one of the myths that came up in the debate—the idea that the other grants somehow are tilted against the north, or the inner urban areas. The housing and planning delivery grant reduction has an impact of £1.45 per head in the metropolitan boroughs. In the shire districts, which Opposition Members thought were getting a free ride, the cost is £3.10 per head. The south-east is paying 90p a head, the north-east is paying 70p a head. Opposition Members’ charge is completely misplaced.
The £29 billion of formula grant—the main source of funding for local government—will be protected. There are no controls on how that money is spent in these reductions. The ring-fencing of non-schools revenue and capital funding is reduced from 10.6% to 7.7%.
Andrew Stunell
I will give way in a moment, but I want to tell the right hon. Gentleman one or two facts that he has failed—
Madam Deputy Speaker
Order. Mr Blunkett, the Minister is declining to give way at this point, and he says that he will give way later on.
Andrew Stunell
I shall give way in a moment, when the right hon. Gentleman has listened to this statistic. [Hon. Members: “Oh!”] Well, a few facts would not go amiss in this debate. In 1998, 4.6% of local government expenditure was ring-fenced. The previous Government put it up to 14%, and we are getting it down to 7.7%. That will give councils the freedom and flexibility that they need to concentrate on local priorities and to protect the front line.
Mr Blunkett
Will the Minister repeat the statistic that he gave on the £29 billion revenue support grant and explain how it will be protected? What will a 30% cut in that grant mean in real terms to local government over the next four years?
Andrew Stunell
My point was about the £6.2 billion of cuts that have been referred to throughout the debate. The decisions on the comprehensive spending review are not mine to reveal.