Local Government Finance

Debate between Brandon Lewis and Louise Ellman

Wednesday 12th February 2014 Commons Chamber

[Brandon Lewis]

I thank my hon. Friend for that, and I know she is rightly fighting hard for her area. As the Prime Minister said today, we must make sure that we do all that we can to ensure that areas have everything they need in this situation, and I will discuss flooding in a few moments.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

On the Government’s own figures, Liverpool has the highest level of deprivation in the country, yet it has an entrepreneurial council that is working hard to back business and support jobs. In those circumstances, with the council showing so much initiative against a background of such adversity, why has Liverpool suffered the greatest cuts of all local authorities in the country?

[Brandon Lewis]

Actually, it has not. A council that has some of the greatest cuts is my own local authority in Great Yarmouth, which was left a black hole by the last Labour Government through the working neighbourhoods fund. I gently say to the hon. Lady that she might want to remind Mayor Anderson that Liverpool’s authority has £116 million in reserve, one of the highest spending powers in the country in the first place, a regional growth fund and a city deal. This Government are working with such local authorities.

Local Government Finance

Debate between Brandon Lewis and Louise Ellman

Tuesday 26th February 2013 Westminster Hall

[Brandon Lewis]

That argument might hold more weight if such areas were not getting almost 50% more than the national average in the first place. Even a constituency such as my own, which has three of the most deprived wards in the country, gets around £2,200. I struggle to have sympathy with the right hon. Gentleman’s argument that getting almost 50% more than the national average is a hardship.

In all the deficit denial and doom mongering that some people have been engaged in, an important message is in danger of not being heard. However, the recent move by Moody’s has once again reminded us of that message. The size of the deficit and the simple fact that local government accounts for a quarter of public spending mean that local government cannot remain immune. It is one of the biggest players in the public sector and it has its part to play in reducing the deficit.

I want to make it clear to hon. Members that this settlement is a fair deal to both the north and the south. Manchester, Liverpool, Nottingham and Newcastle all have higher spending power per dwelling than the national average. I have already commented on the fact that Knowlsey has the highest settlement in its area.

[Mrs Ellman]

Will the Minister explain how it can be fair that the areas with the highest deprivation such as Knowsley and Liverpool—Liverpool is right at the top of deprivation levels—are suffering the harshest level of cuts?

[Brandon Lewis]

I dispute whether that is even correct, bearing in mind that the base point that such areas start from is so much higher than anywhere else. It was the previous Government who left areas with high deprivation, such as Hastings and Great Yarmouth, with a cliff-edge drop in funding of up to 20%, which this Government have had to fix. Places such as Wokingham have been mentioned before in debates on the settlement—Surrey was also mentioned today—but it must be remembered that all the councils under discussion today are at least £500 better off per household than Wokingham is in 2013-14. Knowsley itself is pretty much at the average with regard to its reduction, but it has a spending power of £3,122, compared with an average of just £2,200, so this settlement is fair. Thanks to the new efficiency support grant, the seven authorities that face the biggest hit to their spending power in 2013-14, a couple of which I have just mentioned, are eligible for a funding boost, which ensures that no council faces a spending power decrease of more than 8.8%, despite the previous Government leaving them with one closer to 20%.

Vitally, the system now works in a council’s favour. Through the Localism Act 2011 and the financial reforms in this settlement, some 70% of local authority income will be raised locally. Councils now have more power than ever before, but they need to understand the implications of this settlement and to act in their residents’ best interests and work harder on their behalf. They can do that by redesigning council tax benefit to cut fraud, promoting local enterprise to get people back into work, or redesigning services to make them more efficient and sustainable. There are still savings that can be made. I disagree with the earlier comment about the council tax support position. The money the Government have put in, the opportunities that exist for savings and the flexibilities that have been given to the sector can more than make up for what is needed to be found. Last year, local government showed commendable skill in reducing its budget while still protecting front-line services. Many residents thought services had actually improved. This is about not how much money is spent, but making sure that it is spent in the right way.

Local Government Finance (England)

Debate between Brandon Lewis and Louise Ellman

Wednesday 13th February 2013 Commons Chamber

[Brandon Lewis]

As I said in the debate on Monday, I have an open-door policy and am very happy to continue discussions, and I hope rural areas will be able to put together evidence—perhaps through their rural services network—to back up some of their figures and prove their case. I will happily continue to talk to my hon. Friend in the year ahead.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

The Minister has been involved in a lot of discussions with various local authority representatives. Is he willing to reopen discussions with Liverpool city council? It covers the most deprived council area in the country, yet it has suffered the greatest cuts. How can that be fair?

[Brandon Lewis]

Actually, Liverpool has had a reduction of minus 1.3, so it is no different from anywhere else. However, I will happily meet people from Liverpool council, just as I will those from any other authority and any hon. Member who wishes to see me.