Local Government Finance

Debate between Baroness Berger and George Howarth

Tuesday 26th February 2013 Westminster Hall

[Mr Howarth]

I am grateful to my hon. Friend the Member for Sefton Central for making that point. I have a very great affection for Aintree library, because when it was in my constituency I used to hold surgeries there.

My hon. Friend is right. If he looks at the NAO report, “Financial sustainability of local authorities”, which was produced in January, he will see that the NAO points out that although 93 local authorities

“used reserves in 2011-12, the remaining 260 either made no changes to their reserves or added to them.”

There is an argument about the use of reserves, which the Government have made, but the NAO report goes on:

“There is evidence that local authorities are reducing services, for example in adult social care and libraries”.

Certainly in the Liverpool city region, in terms of reserves there is really nothing left other than what prudentially is needed.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

My right hon. Friend mentioned efficiency savings. Does he share my concern that when Liverpool city council was asked to make £141 million of cuts during the last two years, the opportunity to make efficiency savings was limited because so little notice was given that drastic and severe cuts would have to be made?

[Mr Howarth]

I think the Government have the illusion that local authorities are stuffed full of people with nothing useful to do, and that all anyone has to do is to identify where those people are and all the problems will be solved. However, the reality is that there is no headroom left at all in most local authorities, and increasingly we will find that that will directly impact on services. If there is a reduction in the number of social workers, it has an impact on adult social care, families under stress, children’s services and so on. There is a real problem.

To highlight my hon. Friend’s point, I will look at the latest settlement in terms of metropolitan areas as a whole and in terms of other sorts of local authority. If we deal with things by region, the Liverpool city region is experiencing a two-year cut of £166 per dwelling; in London, the two-year cut is £129 per dwelling; the English average is a two-year cut of £105 per dwelling; Wiltshire is experiencing a two-year cut of £50 per dwelling; and Surrey—that hotbed of deprivation—is experiencing a two-year cut of £19 per dwelling. There can be no doubt about where the cuts are being targeted.