Local Government Finance

Debate between George Howarth and Lord Pickles

Monday 13th December 2010 Commons Chamber

[Mr Pickles]

My hon. Friend is absolutely correct. We have got rid of comprehensive area assessments and all the daft targets, which achieved absolutely nothing. The problem with them was that they cost serious money to put together. That money can now be applied to front-line services.

[Mr George Howarth (Knowsley) (Lab)]

The Secretary of State will be aware that grant floors are important to boroughs such as Knowsley. Can he explain how his banded floors will operate, and will he indicate what percentage will apply in each of the four bands?

[Mr Pickles]

I am happy to do that. Let us deal first with social services authorities. In 2011-12, the floor will be 11.3% for the most dependent authorities, then 12.3%, 13.3% and 14.3% for the least dependent. In the case of shire districts, the floor will be 13.8% for the most dependent, then 14.8%, 15.8% and 16.8%, so there is a good 3% difference between the various bands. Of course, for an authority such as Knowsley there will be a transitional grant on top of that to get the levels down to 8.9%.

Local Government Funding

Debate between George Howarth and Lord Pickles

Monday 6th December 2010 Commons Chamber

[Mr Pickles]

My hon. Friend raises a very important point. The rules are different when sums are being reduced, rather than increased, so it is massively important that we examine all the finance available to local authorities and the gap in spending. I am going to address that most carefully, as I shall do for the precise phasing of the amounts. It is sensible to see these sums taken out at the beginning of the period, because the only way in which local government can approach a 26% reduction is not to salami-slice here and there, but to restructure, share services and the like. If it is going to do that, it had best get on with it.

[Mr George Howarth (Knowsley) (Lab)]

On phasing, will the Secretary of State accept that it is hugely important for boroughs such as Knowsley that the process of damping stays in place? If it does not, incredible swings will take place within a year—even greater than those he is proposing.

[Mr Pickles]

The right hon. Gentleman is absolutely right. Hon. Members may not be aware that some authorities, such as Knowsley’s, are heavily dependent on grant; if I recall it correctly, the percentage is in the upper 70s—

[Mr George Howarth]

indicated assent.

[Mr Pickles]

It appears that that is correct. There are other places, such as Surrey, where we are talking about 20%. If we were dealing with a cut across the board, the effect of an amount coming out of Knowsley’s budget would be considerably greater than if it came out of Surrey’s. That would not be desirable and we will be putting together a system that offers help.

Despite all the bluster and all the complaint, the Opposition would have made some of the same choices had they clung on to office. Perhaps Opposition Members would not like to be reminded that the Labour Government were quietly planning cuts of £52 billion over the next four years. The Treasury’s own figures show that those were front-loaded cuts, with a hit of £14 billion to fall in 2011-12. A small amount of those cuts were made public in the dying days of the previous Administration. The back of a fag packet small print of the March 2010 Budget reveals £480 million of cuts. Those were cuts to regional development agency regeneration, cuts to the working neighbourhoods fund, cuts to the local enterprise growth initiative, cuts to the housing and planning delivery grant, cuts to smaller Department for Communities and Local Government programmes and cuts to time-limited community programmes.

Let us deal directly with the issue of the working neighbourhoods fund. Whether the right hon. Member for Don Valley likes it or not, it was a three-year figure; the programme was coming to the end in March and no money was provided for it to be extended thereafter. We would have been facing precisely the same problem as we are now. Some Members have complained about the end of the working neighbourhoods fund, but we would have been facing this in March.