Communities and Local Government (CSR)

Chris Leslie Excerpts

Thursday 13th January 2011 Westminster Hall

[Mr Jackson]

I am always happy to facilitate an advertising break for Yorkshire and the Humber, as I am sure the Chairman of the Select Committee, the hon. Member for Sheffield South East, would be. In the previous Parliament, a report published by the Local Government Association found that the specific argument against regional development agencies was that they had not overcome the differences in economic growth within or between their areas, and work by management consultants Ernst and Young also found that.

The philosophical underpinning for local enterprise partnerships is that we recognise that there are very local economies. Even in an area such as the north-east of England—I am mindful of the need not to go off the point too much, Mr Robertson—there is a quantum difference between the economic issues that inform decisions taken on Teesside and those that inform decisions taken in Tynemouth, north of Newcastle or in Stockton-on-Tees. Even within that area, there are sub-regional economies, so I think we have made the right decision on local enterprise partnerships.

I want to talk now about the less than benign fiscal climate that we face. I think we will have a mature and grown-up debate today, but it is worth saying that Her Majesty’s Opposition committed themselves to a 20% reduction in local government funding. If members of the Labour party in Parliament and beyond are not going to make that reduction now, and given the Minister’s very good point about the Office for Budget Responsibility having looked at the net reduction as a function of local authorities being able to recoup funding in a way that the Ministry of Justice, for instance, cannot necessarily do, the question is what core services Labour party members will cut.

We have had a lot of lectures from the Labour party recently about local government cuts, so let us look at one example: Durham county council. The unitary authority there will see its formula grant reduced from £263 million to £235 million. We should bear it in mind that Surrey county council, for instance, will see its grant reduced from £178 million to £152 million. Durham seems to find enough funds to spend £3.73 million on communication. It has five diversity officers, four European officers, two climate change officers and an undisclosed number of staff working full time for trade unions. It has also refused to say how much its chief executive is paid. Funnily enough, it is sitting on £93 million of reserves. If I can be slightly partisan, my colleagues and I will accept lectures about the impact of cuts only if all the alternatives to cuts are being pursued.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I assume that the hon. Gentleman is proud to be giving a £1 billion cut in corporation tax to the banks in the coming year. That is value for money, is it?

[Mr Jackson]

I am mindful of the fact that the hon. Gentleman has great expertise as a member of the shadow Treasury team. That is true not least of local government issues, because he and I sit on the board of the New Local Government Network. However, to pick up on the exchanges at Prime Minister’s questions yesterday, the former Government’s lack of effort and application speaks volumes about how imperative they saw the need to deal with that issue.

--- Later in debate ---

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I shall be extremely brief, Mr Robertson, not least because I gather that a Division in the House is expected shortly. I respect the hon. Member for Peterborough (Mr Jackson) in many ways for his contribution, but he may need to look again at his “glass half full” strategy. I suspect that if he has been drinking anything, it will have been the poison in that glass, which has, perhaps, tainted his bloodstream and given him a false sense that local government can skip off into the sunset and cope with a mere wrinkle in its financial settlements. I am afraid that the veneer of normality affecting local government as a result of the spending review he describes masks an enormous near-Armageddon scenario facing local public services, particularly in my constituency in Nottingham.

It is especially cruel that this finance policy should be cloaked in the guise of localism. As a localist, I find it difficult to see anything being devolved other than the axe slashing at public services. I would almost prefer it if the Secretary of State and the Chancellor of the Exchequer were simply to admit straight and up front that they are shifting the burden of public expenditure reductions to local authorities because that way they can get away with the harshness of the impact on public services more effectively. That the Government pretend that this is within the paradigm of localism shocks me.

First, I want to comment, from the Nottingham perspective, on the brutally regressive nature of the settlement for my constituents. It is appalling that the debasing of area-based grant and the abolition of the neighbourhood renewal fund will see a cut of more than £55 million affecting my city. If we roll in any number of other changes, such as the £4 million cut in the concessionary fares grant, the reduction, even with some of the social care uplift, is about 16.5% in one financial year. That is the loss of a phenomenal amount of money for that community.

Alison Seabeck (Plymouth, Moor View) (Lab): Is it not the case that one budget that has been particularly badly hit in Nottinghamshire is Supporting People?

[Chris Leslie]

Indeed, which brings me to my second point—more quickly than perhaps I wanted, but it will help the debate. In Nottingham, the Supporting People budget in particular is falling from £22.3 million to £12.4 million. In correspondence the Minister said, “Well, you can’t really tell what’s happening to Supporting People because we’ve rolled it into a formula grant as part of our localism strategy”. However, we can discern in the formula grant from the fifth block— “Grants Rolled in Using Tailored Distribution”—that the amount of money is falling, and it is the fifth largest reduction in England. Nottingham has some of the highest levels of vulnerability, homelessness, teenage pregnancies, alcoholism—any number of problems that the Supporting People budget should be going towards—so it is incomprehensible that the formula should be skewed in a way that hits our city with the fifth greatest reduction.

Thirdly, we should look more generally at the specific grants. I have to challenge the Minister to justify, if he can, the table of statistics that has come from his Department, which the Library has confirmed. It shows that when it comes to the allocation of specific grants, the most deprived local authorities—the most deprived decile, which is the top 10% of deprivation—will see a minus 12% settlement, but the wealthiest 10% of local authorities will see a growth in their specific grants of 24%. By any measure, a dispassionate observer would say that that is a regressive settlement. Hearing this spinology is a real kick in the teeth for vulnerable communities—trying to pretend that this is a progressive settlement, that everything is rosy in the garden and they should just go for a few more efficiencies or shared services. I am afraid that this is far beyond the good work that many local authorities, of all political parties, have been doing to improve local government and make it more efficient. In the past 10 years, local authorities have been the sector of public services that has driven the most efficiencies—far beyond those delivered by central Government. There is no recognition of that in the settlement—quite the opposite. They have been slapped in the face by the Secretary of State and it will be very surprising if some local authorities do not have severe difficulties setting their budgets.

There are other issues about the fire service in Nottinghamshire having to cut 36 fire engines to 30. There are big issues of safety and other questions within the Department for Communities and Local Government budget, but I have made the simple points that I wanted to make. This is a regressive settlement. It is the harshest in history, and I hope the Minister will at least admit that, rather than trying to cloak the arrangement in the localism on which we should all be trying to agree.