Local Authority Funding

Debate between Debbie Abrahams and Andy Sawford

Tuesday 3rd December 2013 Westminster Hall

[Andy Sawford (Corby) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Streeter, for what I think is the first time—certainly in my role as Opposition spokesman on local government matters, including local government funding, which I shall talk about today.

My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) opened the debate by saying how important it was for her constituents. I congratulate her on securing it, and I thank her for doing so, because my constituents are also concerned about local services. Earlier today, I met 25 members of the University of the Third Age, from Thrapston, a small town in my constituency, and the topic of conversation was the impact of various funding cuts on their lives. They talked about having to pay £6 a week for the Lifeline service in sheltered accommodation, which was previously paid for out of the Supporting People funds. They also talked about the impact on their communities of further cuts to bus services. My county council has reduced the subsidy for local authority bus services by more than any other county council. My constituents said, “What is the point of a bus to a nearby town if I can’t get back from it?”

My constituents also spoke about the isolation that they experience as elderly people. They talked of their concerns about their grandchildren’s school transport costs. They highlighted the impact of cuts to police community support officer funding in their small market town, which have happened partly because local authorities can no longer fund partnerships. My constituents are also concerned—my hon. Friend mentioned this—about potholes and cuts to funding for other things that they see every day, such as street lights. This is therefore an incredibly important debate.

My hon. Friend said the Government’s changes to local government funding fundamentally impact the spirit and ethos of how public services are funded, and I wholeheartedly agree. She spoke passionately about the unfairness of the cuts, as did other hon. Members, including my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown). He said that, in his 30 years in this place, he has not seen anything handed down to communities that is as unfair as these local authority cuts, which are particularly impacting on his city. They are also impacting on Oldham, the local authority of my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams).

My hon. Friend the Member for Newcastle upon Tyne Central drew on comments from the Conservative leader of the Local Government Association, so it is not just Opposition politicians who are raising concerns. Sir Merrick Cockell said that the cuts were having a disproportionate impact on some areas of the community. Recently in the House, the hon. Member for Cambridge (Dr Huppert) said that his local authority and many other local authorities around the country were being “cut to the bone”, but the Government have failed to recognise the very real impact that the cuts are having.

I was struck by the summative description of the cuts that my hon. Friend the Member for Newcastle upon Tyne Central gave: she said that they were Robin Hood in reverse. My right hon. Friend the Member for Newcastle upon Tyne East simply suggested that their impact was wicked. It is not just that funding is being cut. As we all recognise, this is a time of rising pressures. In particular, Members have talked about the costs of dealing with looked-after children. My hon. Friend the Member for Newcastle upon Tyne Central highlighted the 11% growth in the number of looked-after children across the country, and the rate is higher in her area, as we might expect because of the nature of her community. Clearly, it compounds the problem when such a significant cut is meted out to her local authority.

My hon. Friend the Member for Oldham East and Saddleworth spoke passionately, as she always does, about social care. She talked about how the cut in the independent living fund is impacting people in her community. Not only are local authorities meeting only severe needs, but they are being forced to reassess elderly and vulnerable constituents who were previously considered to have severe needs, and are beginning to withdraw the services that those people had come to rely on, leaving them incredibly worried. In some cases, that has perverse consequences. Local authority social care cuts are causing hospitals to use acute hospital budgets to fund social care beds. Surely the Government cannot see that as a good use of public money.

[Debbie Abrahams]

My hon. Friend is making a passionate speech himself. These measures are having an impact on not only local authority services, but the NHS. As we know, we have an accident and emergency crisis across the country, and that is partly because of the impact on social care.

[Andy Sawford]

My hon. Friend is absolutely right. She has considerable expertise in these matters, and I have heard her speak frequently about them in the main Chamber. In my area, the A and E crisis, which means that many people have to wait more than four hours, is happening because the hospital is running “hot”. I do not know whether you have heard that term in relation to your local hospital, Mr Streeter, but it means that the beds are full, and that is partly because there are no social care beds. The services that should help people to return home are not being put in place properly or quickly enough to do that. These things are very much linked, and I hope the Minister will acknowledge that in a way that other Conservative Members have failed to do in some of our debates on health care, and on the impact of local authority funding cuts on a much broader range of public services.

We have quoted Sir Merrick Cockell, the LGA’s Conservative leader, who has called the cuts “unsustainable” because of their scale and pace and the rising demand we have highlighted. The Conservative leader of Kent county council has also said that his county cannot cope with further reductions, and that it is “running on empty”.

Ministers know that local government is the most efficient part of the public sector—the Prime Minister has said so—but they have decided to reward councils for that efficiency by cutting more from them than from any other part of the public sector. Indeed, the Secretary of State for Communities and Local Government approached the Star Chamber to bid for that substantial cut to local authority funding.

The Institute for Fiscal Studies is clear that the total cuts to local government spending will outpace those in the public sector as a whole, and the situation will get worse, not better. The LGA’s excellent report, “Future funding outlook for councils”, incorporates the 10% cut in this year’s spending review, which comes on top of the 33% cut that councils face over this Parliament, and that includes the issue of holdbacks, which I will come to in more detail.

The Minister will no doubt tell us that there has been a 2.6% cut—I hear those figures all the time, and I heard them again on “Look East” just the other day. At the same time, the leader of Norfolk county council was talking about what, by anybody’s measure, was a cut of a third to the council’s budget. Councils simply do not recognise this 2.6% figure; it does not stand up to scrutiny.

The black hole will get bigger: by 2020 there will be a £15-billion black hole in the finances, but the Secretary of State talks about council cuts as though they are modest. I do not think that it surprises any of us when Conservative council leaders raise complaints with the Prime Minister about the language being used, and the reality gap between how Ministers at the Department for Communities and Local Government talk about the level of the cuts, and council leaders’ experience of trying to deliver public services around the country. I have spoken to the leader of Northamptonshire county council. He is a Conservative politician, but we have a constructive dialogue about how we are grappling with huge changes. For example, he is currently scratching his head about how we will sustain Sure Start and children’s centre provision across the county, and how we will continue to provide libraries across a large county.

Leaders of any party know the reality out there, but the Government will not listen to the warnings. They will not listen to the National Audit Office, which has said that cuts are having a direct impact on front-line services. The myth created in the early days of the coalition—that everything could be achieved through efficiencies—simply does not match up to reality. The NAO says that 12% of councils are at risk of being unable to balance their books. That will have disastrous consequences.

The Minister told me in a written answer last week that a response to the Public Accounts Committee report on the financial sustainability of local authorities had been published in September. I cannot find that response, and would be grateful if he could draw my attention to it more directly. It seems that the Government simply do not know how they will respond when councils fall over. The permanent secretary to the Department for Communities and Local Government, when questioned by the Public Accounts Committee, said that councils have a duty to balance their books. Ministers are relying on a statutory duty in the face of reality.

Of course, we know that councils will do their very best, because they will want to ensure that they comply with the law. They will be well advised by their monitoring officers and finance officer. Councillors will want to balance the books. They will know that that will be audited by the new independent local auditor, so they will have to do it—and we know how they will do it: by turning off the street lights; by further cutting social care; by ending the use of the local swimming pool; by closing the libraries; and by stopping maintaining the streets. If they have to, against the Secretary of State’s best wishes, they will do it by stopping some bin collections, which will affect our recycling rates. They will do it by cutting services around the country.

Some councils will find more quickly than others that they need to balance the books. They will not be councils in the north of England only, although many councils there will find themselves in particular difficulty. It is one of the poorest regions in the country, and my right hon. Friend the Member for Newcastle upon Tyne East and my hon. Friend the Member for Newcastle upon Tyne Central are to be congratulated on highlighting the impact on their region, as the Association of North East Councils has also done very powerfully.

Councils all around the country will be affected. We are told that Tory-led West Somerset will be one of the first councils that will have to close its doors and will simply not be able to balance the books. As I understand it, there is an idea that such councils will be taken over by their neighbours. I think that that is the Government’s way forward: the neighbours will step in. However, although I am a co-operator, I must say that when faced with a neighbouring authority that is about to fall over, it would not be prudent of any hon. Member to encourage their own local authority to take on the burden of financial responsibility. The crisis has been created by central Government, and they must face up to it and tell us what their response might be.