Graham Stuart
Main Page: Graham Stuart (Conservative - Beverley and Holderness)(9 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Kris Hopkins
I assure my right hon. Friend that I will consider rural provision in my speech. Since coming to power in 2010, we have recognised that rural communities need additional support. I am sure he will see from the document I laid in the House on 3 February that we have responded appropriately.
Mr Graham Stuart (Beverley and Holderness) (Con)
The Minister says he wants a settlement that is fair to all communities. He has himself recognised that the current settlement, notwithstanding the Government’s efforts, is not fair to rural communities. The central Government grant is 50% higher for urban communities than it is for rural communities, even though rural communities are on average poorer and have fewer services.
Kris Hopkins
My hon. Friend always makes a robust challenge to the figures we lay before the House, because he is passionate about supporting rural communities. When I get to the section on rural communities I will elaborate further.
Kris Hopkins
I suggest that one of the reasons Brighton council is struggling is its poor leadership. Moreover, the figure given by the hon. Lady clearly does not include significant amounts of public money, including money from the better care fund. Some £5.3 billion appears to be missing from the LGA’s calculation.
That £74 million will be topped up with £37 million of additional funding for local authorities during the current year. That extra money will ensure that councils can step up their efforts to get people home as soon as they are ready to leave hospital, and avoid the need for people to go into hospital in the first place. It will help to promote joint working between our local public services, and will improve front-line services for some of the most vulnerable people in our communities.
Mr Graham Stuart
Will the money be distributed in a way that is proportionate to the number of over-65s in local populations? As my hon. Friend will know, rural communities typically contain older, more vulnerable residents than their urban counterparts.
Kris Hopkins
Although I live in a large metropolitan district, I also represent a significant rural area, and I know that many single elderly people live in large houses. That is another form of deprivation, in that they must sustain those houses on limited and fixed incomes.
1 urge all councils to protect taxpayers this year by taking the additional Government funding that is on offer for a freeze. That will enable them to help hard-working households and those on fixed incomes, such as pensioners, with their living costs. The tax-freeze grant will be embedded in councils’ baseline funding. Five successive years of freeze funding have seen council tax in England fall by 11% in real terms since 2010, after being doubled by the last Administration. Our actions will save for the average Band D household up to £1,075 over the course of this Parliament.
Hilary Benn
I shall come to that point directly, but the Minister did not actually contest the NAO figure. The reduction in resources of 1.7% that he has talked about today is a selective figure, because it does indeed include council tax, the better care fund and other ring-fenced funding, but if that is excluded the LGA says that the reduction is actually 8.5%. Whatever the statistics that the Minister wants to argue about, the truth is that local government has faced the biggest reductions in the whole of the public sector, as we heard in an intervention.
We should first pay tribute to councils for the extraordinary job that they have done—councils up and down the country, of all political parties—in trying to deal with the consequences of the cuts, because their effort has been herculean. I pay tribute to the Minister for his tone, which is slightly different from that of his predecessors, but councils really resented the Secretary of State once famously describing the cuts as “modest”—which I bet he now regrets—and the LGA’s fears for the future of local government as “utterly ludicrous”.
Mr Graham Stuart
If we are talking about making admissions, will the right hon. Gentleman now accept that his Government, at what seemed to be a time of relative plenty, skewed funding to urban areas at the expense of rural ones? Now that we are in a period of austerity, which will continue whoever is in power, it is those poorer, more highly taxed and yet lower-serviced rural areas that are suffering most. Will his party pledge to do something about that, or will it carry on putting its own party interests ahead of fairness for the British people?
Hilary Benn
I have to say to the hon. Gentleman that I resent that suggestion. I make no apology for the fact that the last Labour Government provided funding on the basis of need and that local authorities saw an increase in resources under Labour. I do not recall hearing any complaints about that from the then Opposition when those decisions were being made.
Hilary Benn
I am going to make some more progress; the hon. Gentleman has had his answer. I accept the point he has made in a number of these debates about the particular challenges facing rural areas. I want to see a fairer funding formula, and I shall address that a little later.
Ministers are in denial about the scale of the challenge that authorities face and are still claiming that the settlement is fair—this is my first and fundamental point. The Minister told the House in December that the settlement is
“fair to all parts of the country, whether north or south, urban or rural.”—[Official Report, 18 December 2014; Vol. 589, c. 1590.]
He said that again today, but let me tell him that nobody else believes it because it clearly is not true. He does not need to take my word for it; all he has to do is listen to what others have had to say about what Ministers have done. The Audit Commission has said that
“councils in the most deprived areas have seen substantially greater reductions in government funding as a share of revenue expenditure than councils in less deprived areas.”
The Joseph Rowntree Foundation has said that
“cuts in spending power and budgeted spend are systematically greater in more deprived local authorities than in more affluent ones”.
The Public Accounts Committee report on the financial sustainability of local authorities said:
“local authorities with the highest spending needs have been receiving the largest reductions.”
The Chair of the PAC, my right hon. Friend the Member for Barking (Margaret Hodge), said:
“These cuts have not hit all local authorities equally, with reductions ranging between 5% and 40%.
Councils with the greatest spending needs—the most deprived authorities—have been receiving the largest reductions.”
At least the former local government Minister, the hon. Member for Bromley and Chislehurst (Robert Neill), had the honesty some time ago to say:
“Those in greatest need ultimately bear the burden of paying off the debt”—[Official Report, 10 June 2010; Vol. 511, c. 450.]
Today’s Minister mentioned council tax, but the one group of people who have not benefited from any freeze in council tax are those on the very lowest incomes, who have been affected by the changes to council tax benefit. There has been no freeze for them.
Hilary Benn
Once again, I do not accept the charge that this is about distributing funds to friends; it is about having a fair funding formula. I remind the hon. Gentleman that when the coalition Government took office unemployment in this country was falling and the economy was growing—[Laughter.] It is no good Government Members laughing, because the evidence, the statistics, the facts will show that that was indeed the case.
On council tax increases, Ministers have frequently made reference to what happened under the last Labour Government, so I have taken the trouble to look at what actually happened then. The truth is that the biggest increases in council tax between 1997 and 2010 were put in place by Conservative-controlled authorities and the smallest increases were under Labour. Indeed, 11 of the top 15 increases in council tax during that period came under Conservative-controlled authorities, two were under authorities with no overall control and one was under a Lib Dem-controlled authority. I suppose that was a coalition.
Hilary Benn
No. The hon. Gentleman may not like the fact, but the truth is that Conservative-controlled authorities were leading the way in raising council tax. What I am interested in, in this debate, is what the figures show. Why is it that by 2017, as we heard a moment ago, the city of Liverpool, with the most deprived local authority in the country, will have lost half its Government grant since 2010? I have nothing against Wokingham, but why is it on course to have higher spending power per household than Leeds or Newcastle, despite the greater needs of those two cities? Why is it that, having claimed that those with the broadest shoulders would bear the biggest burden, Ministers have done the very opposite to local government? Will the Minister explain why Elmbridge, Waverley and Surrey Heath have been given an increase in spending power over the past five years although they are among some of the very wealthiest parts of the country? They rank among the 10 least deprived local authorities in England. There is a lot of austerity elsewhere, but it does not appear to apply in those places.
Hilary Benn
There is section 106 and there is CIL in order to raise financing. There are also the changes that we are proposing in order to give local authorities, such as the hon. and learned Gentleman’s, greater power over the construction of new homes so that communities can determine where homes are built, but when it comes to the new homes bonus, if one accepts the argument that it is regressive in its impact because it is top-sliced from revenue support grant which is supposed to reflect need and therefore goes towards areas where people want to build homes which tend to be less disadvantaged than others, it is a tough choice. But when people say, “What are you going to do to redress the unfairness of what the coalition has done?”, that is part of my answer.
I know that other Members want to speak so I shall make progress. In these difficult times, what councils want is, first, fairer funding, which we are committed to; secondly, help with longer-term funding settlements so that they can plan ahead; and thirdly, more devolution of power so that they can work with other public services to get the most out of every pound of public funding. We have heard Ministers argue in the past that the relationship of old was based on a begging bowl mentality. A former local government Minister used to talk about that. That is pretty insulting to local authorities which, over the years, have worked hard to grow their economies and create jobs. One cannot look at the growth and success of the city of Leeds over the past 30 years and say that that is the result of a begging bowl mentality. It is because the council, businesses and local people have worked hard to grow the economy, create jobs and improve people’s lives. It was a question of leadership.
That brings me to what is absent from the statement today—devolution of funding to local authorities. I support the city deals that the Government have put in place and I welcome them. I have said that before, but progress has been slow and timid. We had been promised a further deal for the Leeds and Sheffield city regions, following the recently agreed deal with Greater Manchester, but there is no sign of it. Who is running that policy? Is it the Secretary of State, the Chancellor of the Exchequer or the Deputy Prime Minister?
Everyone in the House knows that the reason why the deals are being held up is that the Chancellor wants to impose a metro mayor as part of the deal and the Deputy Prime Minister does not. I am not sure what the Secretary of State’s view is, but he is clearly no particular fan of combined authorities because he said not long ago that he is afraid that they
“will suck power upwards away from local councils”.
In case the Secretary of State has not noticed, combined authorities are local councils coming together freely, voluntarily, in the interests of co-operation, because they see the benefit for their residents. When the Minister replies, will he tell us when Leeds and Sheffield are going to get the same deal as Manchester?
The last point that I want to come on to is about the counties of England. We have heard some voices in the contributions today. It was noticeable that at the recent county councils network conference, for some reason not one of the Department for Communities and Local Government House of Commons Ministers was able to turn up to address the representatives of the county councils. It was extraordinary. I suspect the reason is that county leaders feel wholly ignored by this coalition Government because they see the devolution that has been offered to cities. Where is the devolution to counties and county regions? There is none. If we get the opportunity, we will change that. We would offer economic devolution to every part of England—county regions as well as city regions—to give them greater control over their economic future. On that, I am in agreement with the Minister. We would devolve decision making on transport investment and on bus regulation. If that is good enough for London, it is good enough for the rest of the country.
We would offer funding for post-19 skills, working with businesses and co-commissioning a replacement for the Government’s Work programme to help the long-term unemployed back into a job. We would offer new powers over housing so that communities can build the houses they want in the places they want, and the houses go to the people who need them. By devolving £30 billion-worth of funding—much more than the Government are offering—we would give combined authorities the ability to retain 100% of business rate income growth. The Prime Minister has said that he wants to move towards two thirds, so if he hurries up a bit, he will finally catch up with Labour policy.
Mr Graham Stuart
The right hon. Gentleman said that he would bring in a new, fairer funding formula for local government. Does he accept that in the formula introduced by the previous Government, weighting was put in for density—four times that for sparsity—which has absolutely no link to need, and that is partly why certain parts of the country, even under this Government, have unfairly benefited? Will he unpick that so that sparsity is given greater weight than density, which has nothing to do with need?
Hilary Benn
If we get the opportunity after a certain event on 7 May, I would be very happy to receive representations from the hon. Gentleman and everyone else, because when I say that we want to achieve a fairer funding mechanism, that is what I mean.
In return for this economic devolution deal, all we ask is that local government comes together to form combined authorities across England. Their shape will vary from place to place, because economic geography and travel-to-work areas vary. This is a challenge to local government. Local government says to all politicians, “Trust us more.” Well, we would trust local government more. We would say, “Get organised, and significant devolution of funding is on offer in return.”
Robert Neill
That is certainly true of Labour Governments when they have come into office. I would gently add that when this coalition Government came into office we said that we would abolish capping and get rid of the Standards Board and the comprehensive area assessments, and we did so. We actually delivered on what we said. That is the difference between the two.
Mr Graham Stuart
My hon. Friend is rightly dissecting the speech given by the shadow Secretary of State, who failed to say, despite having repeated opportunities to do so, that he would seek to redress the imbalance between rural and urban areas. Is it not clear that every rural community in this country should recognise that a Labour Government will put its own political interests ahead of a fair and equitable settlement? They should not be fooled by the words that have come from the shadow Secretary of State’s mouth today, because he refused to commit to a change that would make the situation fairer.
Robert Neill
At the end of the day, it is implicit that a Labour Government would carry out a redistribution. We know from experience that the clever—and sometimes surreptitious—tweaking of the weightings in those 270-odd elements that go into the formula grants through the regression analysis was deliberately manufactured to move money away from parts of this country to those that historically tended to vote Labour. There is no getting away from that reality and the same thing will be done again.
My hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald) made a serious point about what would happen to those authorities dealing with housing need, which I thought both parties recognised. The current Government have said, sensibly, that the money should follow the population growth, because that results in the costs of services being given to local authorities. The Labour party wants to scrap that entirely. It is abject nonsense to go down that route.
Mr Clive Betts (Sheffield South East) (Lab)
This Parliament will clearly go down as the Parliament of austerity, but let us go back to 2010 and look at the situation when we began this journey. At the general election in 2010 the economy was growing—[Interruption.] I know Conservative Members do not like to hear that, but it was growing. The Government made a commitment in the coalition agreement to removing the deficit over the course of this Parliament, but that has not happened, has it? That is because the economy stopped growing because of the immediate severity of the cuts. As a result, not only did that happen, but real wages have not grown, the tax take has been less than anticipated, and the increase in housing benefit paid to people in work has grown substantially. That is why the deficit has been cut to only a third or a half—depending on the definition —of its original level.
Mr Graham Stuart
The hon. Gentleman is the only senior commentator I have heard suggest that the economy stalled primarily because of a reduction in Government spending. Surely he should accept that it was to do with the general economic dislocation across the continent of Europe. While the rest of Europe is flatlining, and while this Government have tried to wrestle down the deficit, Britain has returned to growth. We have higher growth this year than any other major economy in the world, and that should be celebrated.
Mr Betts
That is interesting. If the hon. Gentleman is saying that the fundamental problem was a major dislocation in Europe and the world because of the banking crisis and collapse, it is difficult to blame it solely on the Labour Government. After the major dislocation and the recession, the economy had started growing by the time of the election in 2010. It then went back into recession. That is what happened.
We are where we are. Through all the austerity and the pain of service cuts, the deficit is at least half of what it was. In other words, the Government have missed their target by at least 50%. That is the position. Nobody will dispute that, will they? It is fairly clear that the Government missed their target by at least 50%.
We have had all that austerity, but has it been fair? Has it been fair to local government as a whole, to Conservative councils as well as Labour councils, because they will make that point strongly? Why has local government been asked to bear the biggest burden? There is another way of putting that: why do Ministers believe that the services our communities receive from their local councils are less important than other public services? That is important.
Mr Betts
The hon. Gentleman shouts, “We were protecting the health service,” but social care provided by local councils is as important. Of course, that is not protected from the reductions.
The figures I quoted earlier were from the Local Government Association and the Office for Budget Responsibility, so they are clearly right—perhaps hon. Members want to challenge them. The spending that local authorities can control—which excludes schools, public health, which is ring-fenced, and housing benefit—has fallen from 19% of total public sector current expenditure in 2009-10 to 16% in 2015-16. That is a disproportionate cut in local government spending compared with public spending as a whole. There is another way of looking at it: local government spending as a percentage of GDP has fallen from 4% to 2.9%. That is a significant fall.
The Government have tried to spin the 2015-16 cut as a 1.7% cut in spending power, but we should again look at the figures produced by the LGA, which are based on OBR figures. The real figures that local authorities can control, on a like-for-like basis over the years, excluding the better care fund, council tax and the public health grant, which is ring-fenced, show that the cut is 8.5% in real terms. That is the figure.
Ministers like including spending power and they like the better care fund. Hon. Members should read the exchange that the Communities and Local Government Committee had with the permanent secretary recently. He accepted that the better care fund was not part of the grant from central Government to local authorities. That money is included in the budget of the national health service, in the Department of Health. That is where it is accounted for. Ministers cannot count it in both the Department of Health budget and the Department for Communities and Local Government budget. That would be double counting. Ministers count the better care fund in the Department of Health budget, and say, “Ah. We do not talk about the actual grant and money for local authorities. We talk about spending power.” Although the better care fund is in the Department of Health budget, they say that it is part of local government spending power. That is how they get their calculation down to 1.7%. That is how they do it—by sleight of hand. We cannot have that double counting.
That is not to decry or demean the better care fund. The concept of trying to join up health service and local authority social care is obviously a good one.
Mr Betts
I will make a little progress and come back to the hon. Gentleman.
There are major issues. Why are local authorities singled out for bigger cuts? Within local government, why have the deprived communities had the largest cuts? Ministers could make a logical, rational argument. They could say that the authorities with the biggest grant might lose the most grant in cash terms. I might not agree with the argument, but I can see a logic to an argument that says because authorities have so much more money given to them historically, they are likely to lose more when cuts are made. Can Ministers sustain an argument that says authorities historically receiving the most grant, the most needy authorities, should therefore have the biggest percentage cuts? What is the logic for that? It is one thing to argue the biggest amount, in cash terms, should come from authorities with the most cash given to them, but why should they have the biggest percentage cuts? What is the logical argument for that? How can it possibly be right that over the period of this Parliament, between 2010-11 to 2015-16, Sheffield’s spending power—I will use the Minister’s own definitions —has fallen by £230.60 per head and Wokingham’s has fallen by £2.29 per head, only 1% of Sheffield’s fall? How can there be any rational, reasonable justification to explain that cut? How can there be?
Mr Betts
Absolutely. As I say, Ministers can make an argument that those who have had the most grant might lose the most cash, but not that they should have bigger percentage cuts. They are the areas in greatest need. In two years’ time, we will have the ridiculous situation where Sheffield and most of the northern cities, such as Liverpool and Manchester, will have a lower spending power per head than Wokingham. Can anyone on the Government Benches justify that? It is simply not reasonable.
The hon. Member for Bromley and Chislehurst (Robert Neill), an ex-Minister, said he suspects a future Labour Government would find surreptitious ways to redistribute money back to Labour authorities. I think we can be open about this: this Government have not been surreptitious. They have done it blatantly. They have taken money away from the most needy and given it to the most privileged. That is what they have done, to the point where the spending power of Wokingham in two years’ time will be greater than the spending power of Sheffield on a per-head basis. Sorry, but that is just not reasonable and no one can justify it.
The impact is there for all to see. I went around my constituency last weekend and met people. We talk about the need to join up social care and the health service—of course we need to. Sheffield had a wonderful in-house care service provision called “Care for you”, which dealt with some of the most needy people who were in their own homes and required extensive support. Sheffield ended that service because it was cheaper to go to a private supplier that had lower overheads, mainly because it does not train as well and pays the minimum wage at best. I then met a constituent on Saturday whose elderly father’s carer missed four appointments. After 36 hours his father was found collapsed on his bedroom floor and, of course, was admitted to hospital. Why was he admitted? The care package had failed. Why had it failed? The authority was having to make cuts because of the budget cuts. That is the reality of how things are in local government at present. That is not a bad authority trying to do it on the cheap, but an authority trying to reduce spending, because of the massive cuts it is facing, by another £60 million next year. In the end, much of that will have to fall on social care, the biggest budget.
Mr Graham Stuart
The hon. Gentleman talks about double counting. He accepted that the Government had protected the schools budget and the health budget, and that therefore, given the size of those budgets in overall Government expenditure, there would be disproportionate cuts elsewhere. Will he put it on the record that his party would, as it did in Wales, cut the health service to protect local government funding? Tough choices means being clear about what one protects and what one will cut. His party seems to want to have it every which way without telling people the truth.
Mr Betts
I think we should also deal with the myth that somehow the NHS has been protected. If we look at the King’s Fund and other commentators—the British Medical Association, certainly, or go to the GPs in my constituency—its spending has gone up in line with general inflation. Unfortunately, though, it has not been sufficient to cope with the increased demand, particularly from elderly people wanting ever more support from community GPs and hospitals.
If we have dealt with half the budget deficit this Parliament, is the Tory party saying that, if it is returned to power, this scale of local government cuts will continue? Can we really contemplate reducing local government spending as a percentage of GDP from 4% to 2.9% and below? If so, we will not be back to 1930s levels of service provision; we will have gone back even further. The graph of doom is coming. Tory councils as well as Labour councils are talking about it. Figures from the Office for Budget Responsibility show that by the end of the next Parliament, if the cuts continue on the same trajectory, we will reach the point where statutory responsibilities take up the whole local government budget, and nothing will be left for discretionary services. But I do not expect Ministers to respond, because, as the damning report from the National Audit Office said:
“The Department does not understand the impact over time of reductions in funding to local authorities, and the potential risks of individual authorities becoming financially unsustainable if reductions continue.”
That is what the NAO said, and that is the reality we are facing up to.
I do not have time to go into all the issues of decentralisation. I am a decentralist, and I speak on behalf of the Select Committee. We would decentralise not merely spending responsibilities, but tax-raising responsibilities, which the Labour Front-Bench team is beginning to move towards, with full responsibility for retaining business rates locally. I hope we can go further, but so far the Government are not prepared to move in that direction.
In conclusion, there are three big questions that the Government have not answered. Why have local authorities had to face more than their fair share of cuts, compared with other Government services, in this Parliament? Why have the poorest authorities faced the largest cuts—far larger than is proportionate? In the end, do Ministers seriously believe that in the next Parliament we can continue with the same level of local cuts and maintain the financial sustainability of local councils and the services they deliver?
Chris Williamson (Derby North) (Lab)
I congratulate my right hon. Friend the Member for Leeds Central (Hilary Benn), the shadow Secretary of State, on his excellent exposition, setting out Labour’s alternative to what the Government have put forward today.
We are meeting at an apposite time. Hon. Members have referred to the reports of the National Audit Office and the Public Accounts Committee. I have with me a copy of the PAC report. To summarise it in respect of the Government’s record on local government, let me say that the Government have failed to provide leadership on local government finance; failed to understand the impact of the cuts they are making; failed to apply the cuts fairly, as we have heard today; and failed to recognise the effect that the cuts are having on councils’ ability to deliver their statutory services.
Many of us here will be familiar with the “graph of doom” produced by the Local Government Association, which has pointed out that in a very short time local authorities will be capable of delivering only their statutory services, and that if the funding arrangements continue on their present trajectory, many authorities will be struggling to deliver even their statutory obligations.
It was my privilege a couple of weeks ago to re-launch the “Fair Deal for Derby” campaign. Derby has been crucified by this Administration, and the Secretary of State is acting like a giant wrecking ball on local government services in the city. We have seen a reduction in funding for the local authority of some £379 per household in the city of Derby. The cuts that the council has already had to make amount to some £96 million with a further £69 million to find—unless the Government change tack or unless, as we hope, we see the election of a Labour Government on 7 May.
Mr Graham Stuart
Is it the hon. Gentleman’s understanding, as it is mine, that the Labour party has not pledged to increase the overall funding envelope for local government? Will he spell out—in a way that the right hon. Member for Leeds Central (Hilary Benn) failed to do—exactly who would be the losers in a process where there will be no winners except at the expense of others?
Chris Williamson
My right hon. Friend the Member for Leeds Central was absolutely clear about the funding. He said there would be a fairer funding settlement. I cannot see how my right hon. Friend could have been any clearer than that. What we have seen over the past four and a half years is anything but a fair settlement. What we have seen is the neediest and most deprived parts of the country shouldering the biggest burden. What did we hear from the Prime Minister and the Chancellor? We heard that they would not balance the books on the backs of the poorest people, yet that is precisely what they have done, as we heard from my right hon. Friend.
My local authority in Derby will have lost half its budget. Just imagine the impact of that on council services for vulnerable children and elderly and disabled people in our city! Social care has been decimated, and facilities such as street cleaning, street lighting and leisure services are also under threat as a result of the Government’s cuts.
Last week saw the ridiculous scenario, the ridiculous spectacle, of the Secretary of State coming to Derby and suggesting that the council should use its reserves. “The council has £81 million in reserves,” said the Secretary of State. “Why does it not use that money?” Well, as my right hon. Friend pointed out, we can only use the reserves once, and, furthermore, they have already been earmarked. They have been earmarked for new schools, for instance, and for the cost of the redundancy payments that must be made to the public sector workers who have had to be sacked because of the unprecedented cuts that the Government have imposed on Derby. It is ludicrous for the Secretary of State to come to Derby and say that the council should simply use its £81 million worth of reserves, as if they were not earmarked, which they are, and as if it could keep on using them, which it cannot. It is crazy for him to do that.
To add insult to injury, not only did the Secretary of State turn up unannounced, but when the leader of the council, Ranjit Banwait, politely asked if the Secretary of State would meet him, the Secretary of State snubbed him. He said, “No, no, I haven’t got time to meet the leader of the council.” The leader wanted to report some of the concerns felt by councillors and some of the problems that the council was facing, and to put the case for a fair deal for Derby, but the Secretary of State was not interested. He was only interested in making political capital and in speaking to the leader’s political opponents, his own Conservative friends on Derby city council.
As if that were not bad enough, the Prime Minister then weighed in. He appeared on Radio Derby, and he too referred to the reserves. He then made the ludicrous assertion that West Oxfordshire district council, his local authority, had been worse affected than Derby. I do not know whether the Prime Minister has been paying a visit to planet Zog or has been living in cloud cuckoo land for the past four and a half years, but the suggestion that West Oxfordshire has been worse affected than Derby flies in the face of the facts. The facts are very clear. The cut in West Oxfordshire amounts to some £90-odd per household, whereas the cut in Derby is almost £400 per household, which is four times as much.
I know that the Prime Minister went to a very good school. He went to Eton, I understand. I left school at 15, and I was not great at arithmetic, but it seems to me that the Prime Minister could have done with spending some time in Labour’s former “numeracy hour” to work out basic arithmetic, because he clearly got that very badly wrong.
As Labour Members have already pointed out, the cuts have caused the economy to struggle and to go into a downturn. We have experienced the longest recession for more than 300 years, and the slowest recovery for more than 100. Why is that? When this Government came to power, they inherited a growing economy and falling unemployment, We had started to turn the corner, but what did the Government do? Owing to their ideological zeal, their determination to smash the state, and their obsession with neo-liberal economics, they sent the economy into a tailspin.
It is important to bear in mind the symbiotic relationship that exists between the public and private sectors. Where does the Minister think public sector workers spend their money? Where do the almost 1,500 redundant council workers in Derby spend their money? They spend it in the local economy; they spend it on goods and services provided by the private sector. That is why it is important to recognise this symbiotic relationship between the public and private sectors. Members on the Government Benches clearly do not understand that or why the economy has struggled so much and continues to struggle. They claim it is doing incredibly well now—well, you could have fooled me and many millions of people who are still struggling with the cost of living crisis. It is obvious that their obsession with austerity and market-led economics and their hostility to the public sector have been an utter disaster in terms of the impact on the people who rely on those services and on the economy.
What is desperately needed is a Labour Government on 7 May, with my right hon. Friend the Member for Leeds Central as Secretary of State for Communities and Local Government, because he has made it very clear that there will be a fairer funding settlement within the financial envelope. We have also made it very clear that a Labour Government would grow the economy, which this lot have been singularly unsuccessful in achieving. We would then be able to use the fruits of economic growth to sustain our public services, to continue to grow our economy and to create that economic virtuous circle.
Today we saw the ludicrous spectacle and the political stunt of the Prime Minister pleading with the captains industry: “Britain needs a pay rise.” I thought for a moment when I saw that that he had converted to the TUC because it has been calling for this for a long time. Yes, Britain does need a pay rise—a pay rise for ordinary people, not the oligarchs and the hedge fund managers who fund the Conservative party, and whom Conservative Members were hobnobbing with last night at their black-and-white ball. What we need is a Labour Government, and a Labour Secretary of State—my right hon. Friend—with a fairer funding settlement so we can get this country back on its feet, and get our public services delivering the services people in our country desperately need.
Annette Brooke (Mid Dorset and North Poole) (LD)
As a vice-president of the Local Government Association, I wish to start by discussing the LGA figures. They point out clearly that there has been a 40% reduction in core Government funding since 2010, and that today’s settlement will require councils to make a further £2.5 billion in budget cuts. We must all be concerned about the financial sustainability of local government, and I concur with some of the points made by Labour Members and by my hon. Friend the Member for Southport (John Pugh). We must praise councils and councillors across the country for the way in which most have responded to the challenges, finding new ways of working, finding efficiency savings and protecting front-line services—and we find that satisfaction in council services has increased. That is remarkable.
I am proud that this Government introduced the Localism Act 2011 and of the emphasis on local decision making, with some notable exceptions such as top-down pronouncements or when local authorities have to implement local schemes with inadequate funds under constraints set by central Government such as the council tax reduction scheme. On that issue, more transparency on central support—or lack of support as the case may be—would be welcome.
Looking ahead, to deliver services more efficiently and effectively and to drive economic growth we must have devolution within and across England and on demand, building on what has been achieved so far. I do not exclude counties, as it is right that we have bottom-up devolution, through which areas outside the cities have opportunities to have more power. Tax-raising powers should be given to such areas. My right hon. Friend the Chief Secretary to the Treasury discussed that very point this week. Westminster has to let go.
It would be good to see published work on the implications of increasing the proportion of business rates retained by local authorities. I welcome the Government’s inclusion in the final settlement of an additional £74 million for local welfare assistance. I could criticise it and say that it is not enough, but to be honest, I am greatly relieved that all the many representations were listened to, including my own and that of the Liberal Democrat communities and local government committee, of which I am a co-chair. I feel so strongly that local authorities are a place of last resort for people who are destitute and who must be able to access immediate support when some unforeseen crisis has occurred.
Mr Graham Stuart
Can my right hon. Friend explain why her party believes that the local government settlement should and can be determined by the votes of Scottish MPs, when Scotland decides on the distribution of its local government formula itself? That is fundamentally unfair to the English voter whose will at the ballot box should hold in the way that local government funding is distributed.
Annette Brooke
I think I will stick to the issue under discussion this afternoon. I am very much speaking from a personal viewpoint.
Let me continue with comments on the local welfare assistance fund. I wish to address some of the brilliant schemes that the fund has been used to support. I hope that they will be able to continue and that the £74 million will continue—or even be increased—in the future.
On behalf of town and parish councils I wish to make a few general points. It is to be welcomed that no town or parish councils will be subject to the referendum threshold. That has concerned me greatly, because parish councils have taken on more responsibilities as services have been cut from higher level councils. I feel that that is a great deterrent to the taking on of some really important services, such as a community library in my constituency, but concerns remain on the short-changing by some principal councils of Government funding for council tax support. The National Association of Local Councils identified more than 30 such councils this financial year, and its research shows that the number of principal councils not passing on any council tax support funding to town and parish councils will increase in 2015-16.
I have just received a holding answer to some questions that I tabled. I was told that my question on what further action the Minister will take on this issue will take a little more work. I hope that the Minister will be able to give me an answer today. Will he tell me what more can be done to ensure that principal councils pass on this funding, which is intended to be passed on? I represent parts of both rural and urban authorities, and I support the Rural Fair Share Campaign. We have had some welcome steps in the right direction, but there is a central unfairness to rural residents, which is that they receive less in services and pay more. We need much more done in that area.
I welcome the reconsideration by the Government of Christchurch and East Dorset councils’ bid for the transformation challenge award and the allocation now of £867,500. The two councils have been working on service sharing for some time now, following a line suggested by the Government. That process has been hard for staff and a recent survey showed that staff morale is very low. I hope that this fund will mean a smoother process and some reassurances that residents in Corfe Mullen, Wimborne and Colehill in my constituency will not feel that they are on the fringes and left out.
I was very pleased when the three principal councils in Dorset were named as the first winners of the Government’s transformation challenge award in October 2013. With other partners, they are working together to transform how health and social services are delivered across Dorset over the coming years, but despite the excellent work that is taking place, funding for social care remains of enormous concern in my constituency.
I decided to look at my first speech in this House on local government finance and I found that in October 2002 I said that
“in the south-west, a recent analysis shows that there is a £70 million care gap. Local authorities are warning that the social care safety net is not adequate for children, the elderly and the vulnerable.”—[Official Report, 24 October 2002; Vol. 391, c. 452.]
Of course, I was addressing a Labour Government. The needs are rising and the problem is becoming worse, but we should acknowledge that it is this Government who have made moves to bring health and social care funding together to make services work better together and to get more for our money. Those are moves in the right direction, although of course I would like some transparency and clarity about the extra funding available through the better care fund for local authorities.
I recently met the leader of Poole borough council, Councillor Elaine Atkinson, and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bristol West (Stephen Williams). The council leader’s concerns centred around the ranking of Poole, which is the third lowest funded unitary authority in England, and local needs. The greatest concerns were about social care, and I must praise the council leader, who is not a member of my party, for her passion for social care and for producing and providing the best possible services.
In Poole, the over-65s—that includes me—make up 21.61% of the population. That is a very hefty proportion indeed. For the rest of Dorset, the figure is 26.95%, and, interestingly, the figure is lower in Bournemouth. The demands are great and, of course, following the High Court ruling, we have extra expenditure on the deprivation of liberty safeguards. That judgment obviously affects the statutory requirements for all councils, and I am quite sure that it is important, but there is a shortage of funding. Additionally, as many Members have mentioned, there are even more pressures across children’s social care. That is happening for the saddest possible reasons, but at least we are alert to what is happening out there.
With Poole always having such a low ranking, there is very little room for manoeuvre with the extra demands placed on it. There is great concern that not as much money is coming out of the better care fund locally from the Dorset clinical commissioning group as was initially expected. I welcome the fact that Poole is to receive extra funding to help with the winter pressures of people being stuck in hospital when they are sick but do not necessarily need a hospital bed.
A point that the council leader was very anxious to make concerned the difference between Poole and Bournemouth. It is very difficult to make comparisons between different places to argue a case, but her point was that Poole is allowed to retain 25.49% of its business rates whereas Bournemouth is allowed to retain 42.46%. Obviously, that is worked out according to the existing formula. I do not doubt that the figures are correct, but I am beginning to doubt the mechanism, because on the face of it, looking at Poole and Bournemouth, I cannot understand it. I can understand it on the formula, but I think that it will be really sad if we have to wait until 2020 for the make-up of that percentage to be looked at. I would like that to be reviewed earlier.
In conclusion, I have said a lot today about social care, because I think that local government’s greatest concern is that day of doom, as we have heard. The Care Act 2014 is introducing new and welcome responsibilities, but with them come great uncertainty about the scale of the costs. I think that local government has done us proud. It is important that central Government give local government the tools and resources it needs.
Jonathan Ashworth (Leicester South) (Lab)
I rise to make a few remarks on behalf of the city of Leicester, which I am fortunate enough to represent. In common with my hon. Friends the Members for Liverpool, Riverside (Mrs Ellman), for Derby North (Chris Williamson) and for Sheffield South East (Mr Betts)—he is no longer in his place—I represent a city that sadly often scores far too highly in the deprivation league tables, yet it has had to cope with significant budget cuts under this Government. That is why I wholeheartedly endorse the vision laid out by my right hon. Friend the shadow Secretary of State in his opening speech on the need for a fairer funding settlement.
I also endorse the shadow Secretary of State’s vision for devolving more powers to local government, because although our city has huge levels of deprivation, we have tremendous potential. We are an exciting and vibrant city, with 9,000 businesses in our city centre and two first-class universities producing graduates who go on to work in the east midlands’ manufacturing base and computing base. Our mayor, Sir Peter Soulsby, has been integral to our city deal and central to getting a deal that will see IBM bring 300 jobs to the city. Indeed, IBM praised the work of the city council when it announced that it was coming to our city.
Leicester’s cultural life is rich. Next month we will reinter King Richard III at Leicester cathedral. While we will be putting on a celebration that is literally fit for a king, 2 miles down the road in Spinney Hills a third of children are growing up in poverty—half the children if we include housing costs. Later this year we will host rugby world cup games, which many will enjoy coming to Leicester to watch, yet 2 miles down the road from the King Power stadium, on the Saffron Lane estate a quarter of the children are growing up in poverty. Some 3,000 families across Leicester are trying to cope with the bedroom tax. Food banks have doubled across our city over the past two years. Our Sikh gurdwaras report that the number of people turning up for free food has increased over the past two years.
However, by 2015-16 Leicester city council will have seen a real-terms cut of 45%—£95 million cut from its budget—for a city that ranks in the league tables as the 25th most deprived in the country. On the Government’s own figures for revenue spending per head, it is losing £205 per person. As my hon. Friend the Member for Derby North and others have said, what a contrast that is with the losses in some of the wealthier and more well-heeled parts of the country, such as in the Prime Minister’s backyard. We are seeing the ending of crisis loans and community care grants and the ceasing of funding for welfare support. In a city where there is such reliance on food banks and other providers of that ilk, I dread to think what that will mean.
Mr Graham Stuart
I wonder whether the hon. Gentleman can tell us what the unemployment rate is now in his constituency, including that for young people, compared with 2010.
Jonathan Ashworth
The unemployment rate increased quite significantly under this Government, and it has now begun to come down, but in my constituency it is still above average. Is that okay for the hon. Gentleman? I concede that unemployment has come down, but in Leicester it is too high and we need to get it down further.
Mr Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in this debate. We have heard a number of excellent speeches from both sides of the House, none more brilliantly delivered than that of the shadow Secretary of State, the right hon. Member for Leeds Central (Hilary Benn), who in the most lucid way presented a picture of a much fairer settlement for local government, if only the Labour party came to power. No one in the House has such a pleasant and agreeable manner as the right hon. Gentleman, yet beneath that surface we heard nothing to tell us about what the Labour party would do if it got into power.
Despite all the protestations from Labour Members about the dreadfulness of spending reductions for local government, we know that the Labour party is not committed to spending any more at all. So if anyone is to win, by the sound of it, it will be the local authorities that already have the largest and most generous settlements from central Government, whereas those local authorities in rural areas with an ageing population which, on average, is poorer and has a lower average income will lose out. People in rural areas already pay a significantly higher level of tax and have weaker access to services, yet they will lose out if Labour comes to power. That has not been stated categorically. Members have asked for greater transparency. We got no transparency from the Labour party today.
Tonight our job is to vote. The House decides this evening on the settlement—the distribution of funding to local government across England. It is Labour policy that in a year’s time 35 or perhaps—in the Labour party’s worst nightmares, and it is not that unlikely— 40 Scottish National party Members of Parliament will be able to dictate the distribution of local government funding in England, despite the fact that at the general election people expressed a preference for an entirely different vision. That is possible. When there is greater devolution to Scotland, it is quite wrong that we are unable to distribute our own funds within England in a way that does not allow that to be dictated by those who represent people whom it does not affect. I would like to put that on the record.
As we discuss this subject, I am disappointed that I must again highlight the unfairness that my rural constituents and others across this country face in the settlement. I do not accept the Government line that this is a fair settlement for all. I recognise, though, that they inherited from Labour a funding system so skewed, so indefensible and so politically rigged that it was a shameful scandal. It was one in which, when the numbers could not be made to work out to the political preference of the then Labour Ministers, officials were asked to invent new technicalities in the system—new ways of ensuring that the money went where those Ministers wanted it to go. What did they come up with? They decided that they would use density as the weighting to drive the money where they wanted it.
The new formula had all sorts of perverse outcomes. For the most part, it delivered the additional funds to Labour seats that Ministers were aiming for, but it was totally wrong, because density, which does not link to need in any way, was set at four times the weighting given to sparsity, which does link to need. Although it served the party political purposes of Labour at the time, it also led to perverse outcomes in distribution across seats in areas represented predominantly by Liberal Democrats or Conservatives. It was fundamentally unfair, and areas of the country that are rural and have lower incomes have lost out ever since. This Government inherited a deeply skewed, morally unjustifiable funding settlement from Labour, and nothing we have heard from Labour Members today suggests that they do not plan to return to precisely the same methodologies if they get back into power.
I welcome this year’s announcement of an additional £4 million for rural authorities through an increase in the rural services delivery grant, which did not exist until this coalition Government came to power and recognised the need to do something to address the inequalities in rural areas. In meetings with Ministers this year, colleagues from multiple parties have received the clearest recognition yet that the Government accept the principle that the funding system is biased against rural areas. I am grateful to Ministers who have begun to right the historical injustice brought about by the previous Government. My right hon. Friend the Member for East Yorkshire (Sir Greg Knight) wished to be present when I was speaking but was unable to be here. However, he fully supports the points that I am making on behalf of all the people in east Yorkshire.
On average, as has been said—it is worth repeating after the excellent speech by my hon. Friend the Member for Newton Abbot (Anne Marie Morris)—that rural residents pay £81 more in council tax than their urban counterparts and earn less, on average. Over time, it has been good to see Labour Members slowly taking in this fact; it has been dripping in. People in rural areas are not living in some prosperous idyll—far from it. On average, they have lower earnings than people in urban areas and face greater costs in accessing services. Yet rural residents, who pay more council tax and are poorer, on average, receive £153 less per head in central Government grant than do those, on average, living in cities.
Mr Stuart
In a moment. This is not about Toxteth or areas of the most concentrated deprivation; it is about a broader picture in which it would be perfectly possible to protect the most deprived areas of, say, the hon. Gentleman’s constituency while seeking to address an imbalance in the funding formula.
Chris Williamson
The hon. Gentleman talks about the income profile of rural residents being somewhat lower. Would he therefore support me in encouraging those living in rural areas to join a trade union to try to improve their living standards and incomes?
Mr Stuart
I appreciate the hon. Gentleman’s point, but that would mean a further bill for a left-wing organisation and we know where that leads. He will be aware that in the past couple of years the wages of non-unionised workers have eclipsed those of unionised workers and that the TUC is, for the most part—as, indeed, is the hon. Gentleman’s party—a front organisation for those who receive money from the public purse. Trade union membership does not have a great deal of relevance to those who work in the private sector, which exports across the world and generates the wealth that pays for those of us, including MPs, who are paid from the public purse. However, I would always welcome and support anyone who wished to join a trade union, if they saw fit to do so.
Although there is a smaller gap of £73 per person between rural and urban spending power, it is smaller only because it takes into account the higher council tax that rural residents have to pay. Poorer rural residents are subsidising richer urban authorities. That is worth repeating, because anyone listening to the impassioned protestations of Labour Members would think that was not true: poorer rural residents are subsidising richer urban authorities. There is no acceptable justification for that status quo.
The fact that the Government have introduced the rural services delivery grant during this Parliament and increased it every year is welcome recognition of the rural penalty. This year its value has been set at £15.5 million, or £1.20 per head. At just 1% of the shortfall in the main central Government grant, that additional money does not by itself deliver a fair deal for rural areas.
Mr Stuart
I will happily give way to the hon. Gentleman. Perhaps he will be able to provide us with more honesty than those on the Labour Front Bench and give the House the honest account of who the losers will be if Labour comes to power. I suspect there would be further injustice for rural residents across England.
Jonathan Ashworth
The hon. Gentleman was very keen to intervene on virtually everybody else who has spoken, so I am pleased he has eventually given way to me. If I follow his argument correctly, is he saying that the funding settlement for cities such as mine is too generous?
Mr Stuart
I am grateful to the hon. Gentleman for making that point. I had hoped that he would talk about the fact that his party would not invest any more money in the local government funding settlement. If his reading of what his Front-Bench colleagues have said is that his area will receive more money—I think that is the case—that means that the injustice for poorer rural residents will increase. It is not the case that urban authorities in general are unfairly funded or have had disproportionate levels of cuts, because that funding was skewed in the direction of urban areas in the first place. The Labour party refuses to explain how it would have dealt with local government funding in this Parliament.
Justin Tomlinson (North Swindon) (Con)
My hon. Friend is making an excellent speech. Labour has said that it would raid the new homes bonus, which is worth £6 million to my local authority and which we are getting to fund infrastructure as a reward for taking development and building the new houses we need. Frankly, it is disgraceful that Labour wishes to raid that and redistribute it to other areas. My residents will certainly not support that.
Mr Stuart
My hon. Friend is absolutely right. The hon. Member for Liverpool, Riverside (Mrs Ellman) said how deprived Liverpool is, but what she did not mention was what has happened to unemployment there, which, as in Leicester and Derby, is down under this Government. That is not because Labour has suddenly become enterprise friendly or is the result of decades of failure to promote enterprise, prosperity and wealth creation; it is because this Government have created the conditions that have helped drive down unemployment. By putting in place incentives such as the new homes bonus and understanding that incentives drive behaviour, this Government have tried to create a response in councils that will lead to the right outcomes for people.
In that way, in 20 years’ time, the successors of Labour Members representing urban areas will not be shroud-waving proudly in the Chamber about how deprived their communities are; they will be celebrating the fact that their communities have been transformed and made more prosperous. That is the coalition Government’s vision, but through all the years of false boom presided over by the Labour party, so many people in urban centres represented by Labour Members were left to fester. Too many people were left on dole queues, from which they are now being removed by precisely those policies, such as the new homes bonus, that encourage the right behaviour.
As my hon. Friends have said, there is a risk. Areas doing the right thing and challenging the nimbys—saying, “Look, we need housing, and we want it to be affordable; we want affordable housing and market housing; and we want housing to accommodate our young people and give them hope for the future”—need to be rewarded with the funding to put in place the infrastructure to make such developments saleable to their residents. However, Labour Members want to strip away the new homes bonus. Yet again, they just do not understand. They want everyone to take the money from the central public purse. They talk about devolution, but that in fact means more central control. They talk about improving incentives to do the right thing, but they want to strip away the new homes bonus. Their approach to local government finance is incoherent and damaging, and it will lead to a raid on the already poorly funded and inequitable settlement for people in rural areas.
The discussion today has covered social care. Like the right hon. Member for Mid Dorset and North Poole (Annette Brooke), I attended debates about care during the last Parliament. I cannot say they were massively attended, but time and again she and I faced Labour Ministers who said they were sympathetic to bringing social care and the NHS together. What did they do? Absolutely nothing. I remember, as she will, that after they had been particularly sympathetic to the direction of travel, they gave a 4% increase to the NHS and a 1% increase to social care in their next financial announcement —and they wonder why we have not created a more co-ordinated system. This Government are working to bring the NHS and social care together so that there is seamless support for an ageing population.
The ageing population is disproportionately located in rural areas, such as the East Riding of Yorkshire—including my constituency of Beverley and Holderness—which have had the largest increases in the numbers of over-65s and over-80s in the country. That drives cost, but the Labour party would allow the money to be skewed to their core areas, which on average have much younger populations and no such needs. To look at the NHS settlement as a parallel, at the end of Labour’s time in office, Tower Hamlets, with its peculiarly young population, spent four times more on each cancer patient than Dorset, with a very aged population. That is gross inequity, but the first time we hear anything from Labour Members is when a Government who inherited appalling public finances seek, inch by inch, to create a little more fairness.
I want to finish in the same way as my hon. Friend the Member for Newton Abbot. I am sad that no Conservative Ministers are on the Front Bench at the moment, but I know they are assiduous readers of Hansard. I say to the Under-Secretary of State for Communities and Local Government, the hon. Member for Bristol West (Stephen Williams), that I hope the Liberal Democrats and the Conservative party—I would like to say this of the Labour party, but I am not holding my breath—will make a manifesto commitment to bringing in a truly fair funding formula based on need. The right hon. Member for Leeds Central talked about that, but he would not in fact implement it.
As my hon. Friend the Member for Newton Abbot said, I hope that a commitment will be made in the Budget before the election to increase the grant to at least £30 million a year. In that way, we can close the gap between urban and rural areas by 2020, recognising that people in rural communities are older, have lower average incomes and pay higher council tax, and recognising the fact that they deserve justice—at last—from whoever is in power on 8 May.
Richard Burden (Birmingham, Northfield) (Lab)
From a seaside town, we move to an inland city that also has great needs that are not being met by the settlement and the policies of the Government.
I wish to say a few words about a specific issue affected by the settlement imposed on local authorities like mine, and then to make a few points of more general significance, particularly as regards Birmingham. I was in Birmingham this morning, and for once there was some good news. For many months, school crossing patrols—lollipop men and women—have been under threat, as a result of the huge cuts being passed down to our city. It has caused massive concern among parents, schools and everybody who worries about children’s safety, and I pay tribute to the unions in the city for spearheading the campaign and to our local paper, the Birmingham Mail, for highlighting the issue.
The good news is that the campaign has borne fruit. We are not out of the woods—there will still be fewer school crossing patrols, and there needs to be a discussion between schools and the council about what their respective responsibilities should be—but today the Labour city council confirmed that it would maintain school crossing patrols on the busiest roads where there were no other controlled crossing points and where the only other crossing point was a zebra crossing. The council has listened. In a meeting I had with it yesterday, it said it would redouble its efforts to integrate school crossing patrols in an effective overall strategy for providing safe school routes, whether that be 20 mph zones or by encouraging safe walking and cycling to schools. That is the good news, and I pay tribute to all those I have mentioned, as well as my fellow Labour MPs from the area, for spearheading that campaign.
The less good news was the response from the Secretary of State. I too am sorry that he is not in his place. Indeed, I am sorry that the Under-Secretary of State for Communities and Local Government, the hon. Member for Bristol West (Stephen Williams), has been left entirely on his own by his coalition partners—oh, he has now been joined. Anyway, perhaps he will pass on a few sentiments to the Secretary of State, who, as my hon. Friend the Member for Derby North (Chris Williamson) mentioned, made a sweeping visit to the midlands last week. When confronted with the issue of school crossing patrols in Birmingham, he said:
“We had to send someone in to look at Birmingham because it’s been so badly run for quite a long time.”
In fact, his party ran it for quite a long time! He continued:
“We’ve made a number of recommendations and it really does need to start looking at the more important things that will bring in quite a lot of money, than start messing around with people who take kiddies across the street and keep them safe.”
How dare he? This is from the Minister who railed against the use of CCTV outside schools to deter drivers from parking where they should not—something that parents know is a problem in front of many schools. To grab a headline, he wanted to get rid of one of the tools that could keep those children safe, and he tried to force it through in his deregulation Bill, but was forced into a U-turn when his colleagues said it was important to exempt schools from his ban on CCTV. How dare he imply that cuts to school crossing patrols are simply a Birmingham problem, when we know, from research we have done, that two thirds—66%—of local authorities have cut the number of school crossing patrols since 2010? That means 1,000 fewer lollipop men and women than when the Prime Minister took office.
In 2013, the shadow Transport team obtained through freedom of information requests the following figures on road safety budgets and staffing levels in 133 local authorities. It found 92% reported having to cut their budgets from 2010-11 to 2013-14. Of those, there was an average budget reduction of over a third—42%—while two thirds of all local authorities responded by cutting staff working on road safety in the same period, and nearly half of all respondents—49%—had cut budgets for walking and cycling. A recent survey by Brake revealed that two thirds of the parents of primary school children think roads are unsafe for walking and cycling, while Sustrans has reported that about the same number of parents say their child has experienced a “near miss” on the school run. The latest figures show that in 2014 the number of children killed or seriously injured rose for the first time in 20 years. Progress on reducing casualty rates is stalling under this Government, with three consecutive increases in road deaths last year.
So how dare the Secretary of State make those comments about school crossing patrols in my city? How dare he do so when our city has lost a third of its budget since 2010—the equivalent of £161 per household compared to a national average of £47, which is far more than places such as Surrey that have seen their spending power increase? A number of hon. Members have raised that point.
For the 2015-16 financial year, we in Birmingham are facing the largest cut in history, of £100 million, at the same time as we need to spend more money on child protection and social care. More than £250 million-worth of savings are required by 2017-18, and the total between 2010 and 2018 will have been £821 million, as my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) pointed out a little while ago.
We have been urged to spend more—and rightly so—on child protection and safeguarding, but we face a Government who will the end while cutting the means to achieve precisely that. Birmingham is facing yet another above-average cash cut in spending power to 2015-16—as I say, about £161 per dwelling, which is 6%. That is more than three times the national average cut of £47 per dwelling.
Mr Stuart
I am grateful. Because the hon. Gentleman’s speech is so gloomy, I thought he might like to hear something more positive, which is that the unemployment rate in his constituency has seen a bigger cut still. It has halved since 2010. Is it not true that every Labour Government leave more people on the dole than when they came in, and that it is the Conservatives who put the country back together, put people back to work and put money in their pockets?
Richard Burden
I said I would give way only once to the hon. Gentleman, but I will give way again. He has looked at the figures for my constituency, so let me ask him what has happened to long-term unemployment?
Mr Stuart
The hon. Gentleman will be aware—[Interruption.] I will tell him. Between 2009 and 2010, the number of people who were long-term unemployed in his constituency went up from 460 to 1,090—more than doubling in the final year that Labour was in power. That was a perfect encapsulation of Labour’s impact on ordinary working people: they get disadvantaged.
Richard Burden
The hon. Gentleman has perhaps missed the fact that there was a worldwide recession at that time, as a number of my hon. Friends have had to remind Conservative Members. Another theme in the hon. Gentleman’s statistics is that when Labour was power before the worldwide recession, there were 25 young people in my constituency out of work for more than a year. There are now five times that number. If people are out of the labour market, they find it very difficult to get back in. Frankly, this Government’s policies are doing nothing to address that problem.
Judging by what we have just heard and what we heard from the Minister who opened the debate—who knows whether the Minister now on the Front Bench will say the same when he winds up the debate?—it is clear that they still do not get it. They simply do not get it. Whether in a city, or in a town on the coast or inland, or in a rural or urban area, if needs are greater but areas face percentage cuts similar to those of more affluent areas—or, as my hon. Friend the Member for Sheffield South East (Mr Betts) who I am pleased to see just back in his place said, if the percentage cut is even greater—the former will be hit harder. Services suffer more, and real people suffer more. That is the reality that Birmingham faces.
We have heard a few times from Government Members that urban areas such as Birmingham were favoured or featherbedded in the past. Government Members are fond of claiming that anything that is not right today is somehow the fault of the Government who were in power before 2010. Birmingham was a Conservative council from 2004 until 2012, when the Conservatives lost power. I do not remember a single Conservative councillor, a single Liberal Democrat councillor or, indeed, a single Conservative Member of Parliament in Birmingham claiming during that time that their city—our city—received too much from the Labour Government. I do not remember any of them saying that we could easily afford to lose another third of our budget, and up to two thirds in the future. I do not remember any of them saying any of that while they themselves were trebling Birmingham’s debt, so let us have no more buck-passing from Ministers now.
We need a funding formula that is fairer—a funding formula that is based on the principle that those in the greatest need receive the most support. My right hon. Friend the shadow Secretary of State has outlined some of the ways in which that could start to happen, but at present we do not have a fair deal. Unfairness is at the heart of the Government’s local government policies, and I am convinced that that will not change in the next few months. It will require a Labour Government after 7 May to ensure that change happens.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
It a great pleasure to follow my hon. Friend the Member for Birmingham, Northfield (Richard Burden). Not only do we have adjoining constituencies, but when I became a Member of Parliament in 1997 I took over part of his constituency, so our work has always overlapped.
I want to talk about cities, and the future of cities. Cities do not reflect the national economy; they are the national economy, and that has never been more true than it is today. Whether we are talking about Birmingham, greater Birmingham or a combination of authorities, those big conurbations and their populations are a driving force.
In the 19th century, Birmingham exploded in size. Formerly an insignificant village, it became the fourth largest urban centre in the United Kingdom, and few of the 175,000 men and women who lived there had been born locally. Birmingham was also the most divided city in the country in the context of religion: no one Church was predominant, and the tone was set by various Protestant nonconformist denominations. It was also an aspirational community, which was proud of its innovation and enterprise, its skills and its people.
The late Joe Chamberlain made Birmingham the best-governed city in the empire, and he did so in important ways. He wanted clean water, because it was a public health good. He wanted a gas supply to modernise the city’s infrastructure and raise revenue to support business rates. He wanted better housing for the people, and he wanted free primary school education, because skills were the foundation for future prosperity and well-being. This is not just some pointless history lesson; it is about the “civic gospel” that was Chamberlain’s vision of cities. Every generation must rediscover its own civic gospel according to its circumstances.
These are the questions that I really want to ask Ministers. What is their vision of cities? What is their civic gospel? How do they see the future? I can tell them what my vision is. The city of Birmingham contains 1.1 million people, of whom 238,000 were not born in the United Kingdom, of whom 53% are white British—compared with a national average of 80%—150,000 are Pakistani, 65,000 are Indian, and 50,000 are black Caribbean. Of those people, 46% say that they are Christian, 22% say that they are Muslim, and 20% say that they have no religion at all. Regardless of where those people come from and regardless of where they were born, however, 86% say that they are British. It is a very young city, too, with 40% of the population under the age of 25 and 30% under 15. It also has pockets of the most persistent unemployment, and they are very often in the very areas where we have the increase in the birth rates.
The city also trains 40,000 graduates every year, but we do not as yet hold on to the graduates we are creating. So I say: let us define the responsibilities of the city. They include education, linking schools with employers, providing public health, looking after the vulnerable, whether young or old, and providing decent infrastructure.
That takes me to the settlement, because this settlement will not allow us to do that. If the Secretary of State’s vision of the town hall is that it is no more than a call centre, let us talk about that. Let us use that as the basis of saying that the Conservative Government vision of local government is so minimalist that it has statutory duties and beyond that very little extra. Let us have a debate about that. I do not think the Secretary of State is making that case, however. He is saying he has a much greater vision, including to do with wealth creation, but the funding structure simply will not allow us to do that.
I am also going to be frank now. Not all is well in Birmingham. We must acknowledge that. There have been some deep systemic structural failures in that city going back over several administrations. We have had three major reviews—Kerslake, Warner and Tomlinson. They have shown us a way forward. The city must grasp that and say, “This is our chance to come to terms with some of the problems of the past and put them right.”
While I do not want to be party political, I do want to make one point. Lord Whitby built a magnificent library which will cost £1 million every month for the next 40 years before we even put in the first book or the first people of Birmingham go through the door. Interest payments on that library are costing us £1 million a month, which is more than the city of Birmingham spends in the entire year on traffic wardens outside our schools. In respect of his £188 million project, he said he was “saddened” that the city council was cutting the services and the hours. I am not just saddened; I am very disappointed. He says he is sad and he tells us through the newspapers that he could find solutions to this by involving local business. As he does not seem to be overtaxed by making speeches in the other place, perhaps he would like to broker such agreements and talk to local businesses and bring them in.
The problems of Birmingham are the responsibility of all of us, not just of that city. It is a city that is more dependent on Government grants and therefore requires high levels of expenditure, yet it has had reductions in funding year on year, the last one being 18.6%. It is growing consistently, too, which creates its own specific responsibilities.
We are not just facing cuts; as my hon. Friend the Member for Birmingham, Northfield said, we are also having to increase spending on child protection services—an extra £21.5 million—and on older people and younger adults by £6.5 million. As I said in an intervention, on the current trajectory by 2018 we will have lost two thirds of our discretionary spending. Where is the long-term structural solution coming from?
I want to make a further point. The ethnic diversity of Birmingham is also one of its strengths. Ethnic cohesion in that city is far stronger than people realise or acknowledge. I was in Manchester when the Moss Side riots flared up. I never want to see anything like that happening in our cities again. When Haroon Jahan died in Birmingham in 2011, his father called for calm and asked the community to stand together.
I am proud of the fact that our only Jewish primary school in Birmingham has got more Muslim than Jewish children. It is a very Jewish school, but the Muslim population sends its children there. Our Catholic schools also have large numbers from the Muslim communities. We need to foster that diversity and ambition, because part of what I see as our civic future is for Birmingham to succeed in life sciences, manufacturing and technology. Our population, our young population, our location and institutions could help us to achieve that. If we do not, and if our cities fall back to the difficulties that we had in the 1980s—frankly, the kind of funding structures being offered to us are on the road to such difficulties—it will not be only a Labour city council’s problem, or even a Conservative city council’s problem, it will be a problem for all of us. Our cities are the lifeblood that provides everything.
Where do we go with this? Whitehall is not minded to give more money to our cities, so I do not think there is any other way but to look at independent funding streams, which give reliability and certainty that the areas generating the wealth will keep it. I am agnostic as to whether we go for land tax, stamp duty, business rates or whatever the streams are, but all the talk of devolution and returning responsibility to our cities and city leaders will go nowhere unless we make our cities our opportunities. Our cities are our strength.
I heard all that discussion about rural areas, and as a Bavarian farmer’s daughter, no one needs to tell me what the countryside is like, I remember it well, thank you very much—
Andy Sawford (Corby) (Lab/Co-op)
The debate has illustrated just how clueless the Government are about the impact of the cuts imposed on local government. As we have heard, the Government have been criticised by the National Audit Office and the Public Accounts Committee for not understanding the real impact of the cuts. What is worse is that they are deliberately trying to hide how the cuts have been distributed unfairly.
We have heard how the areas of the country with highest need have received cuts up to 16 times greater than those with the lowest levels of need. Places such as Elmbridge, Waverley and Epsom and Ewell have had a funding increase at a time when local government’s grant overall has been reduced by 40%. We have heard from Members such as my hon. Friend the Member for Derby North (Chris Williamson) about their authorities facing cuts of up to £50 million. The figure is even more in larger authorities such as Birmingham. In those areas, times are extremely tough and I echo the remarks made by my right hon. Friend the Member for Leeds Central (Hilary Benn) in paying tribute to the great work of councils of all parties up and down the country. In particular, I acknowledge the great work of Labour councils who, on the whole, have faced much larger cuts.
The National Audit Office found that the Government will have reduced funding to local authorities by 37% in real terms over this Parliament. The Local Government Association says that it is a 40% reduction and the Government tell us that it is a 1.7% reduction. Nobody, but nobody, believes their figure. Even if we attempted to massage the figures by including council tax and other ring-fenced funding, as we have heard, the LGA says that that would mean an 8.5% reduction. Within that, there is double counting.
My hon. Friend the Member for Sheffield South East (Mr Betts), speaking from his experience as Chair of the Select Committee on Communities and Local Government, forensically took apart the Government’s claims, highlighting the double counting and the money sitting on the NHS books that DCLG Ministers claim is available for councils. The hon. Member for Southport (John Pugh) called it sophistry. In a damning turn of phrase for a coalition MP, he said that sophistry to disguise the cuts would be cowardly, but to deny them is dishonest and dangerous. That is what is happening.
Will the Minister commit to publishing the cumulative impact of funding reductions on individual councils? The National Audit Office has requested that, and I have tabled written questions to that effect, although I received a very disappointing response today telling me that the information will not be made available. As the hon. Member for Southport quite rightly said, that is an attempt to disguise what is really happening, because those figures would expose the deep unfairness of the cuts.
My right hon. Friend the Member for Leeds Central referred to the comments of the Public Accounts Committee, the Audit Commission and the Joseph Rowntree Foundation, which has stated:
“Cuts in spending power and budgeted spend are systematically greater in more deprived local authorities than in more affluent ones”.
My hon. Friend the Member for Blackpool South (Mr Marsden), who represents the sixth most deprived area in the country, talked about the cost pressures in his area, with the rising demands on children’s services, the growing elderly population, the challenge of implementing £90 million of cuts and the loss of 759 council workers. We do not denigrate those people as town hall bureaucrats in the way coalition Ministers do; they were providing a valuable public service in their communities. My hon. Friend talked about the thinning of the very fabric that has kept that community together. I recognise those remarks, as I am sure do hon. Members on both sides of the House.
We have heard today that by 2017 the city of Liverpool, the most deprived local authority in the country, will have lost over half its Government grant compared with 2010. In fact, my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) told us that the latest estimate is 58%. That, in her words, is “devastating”. The council has taken measures to become more efficient, to generate new revenue streams and to reduce and use reserves as effectively as possible while maintaining a reasonable level of reserves, but it is also having to make cuts that are damaging people’s lives. The truth is that no councillor wants to talk about that. Her great city mayor, Joe Anderson, and the councillors serving the city do not want to talk about the incredibly difficult decisions they are having to make, because they are doing their very best to keep the show on the road. However, as my hon. Friend said, older people in her city are being deprived of care despite their growing needs. She said that at the start of this Parliament 15,000 people were receiving care and help, but now the figure is 9,000, so there is a real unmet need. That is the human cost of the cuts. That is the real tragedy.
My hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) talked passionately, as she always does, about the great city she represents. It is a diverse and young city that trains 40,000 graduates a year. She talked of her vision for the city and all the opportunities to exploit its great strengths in sectors such as life sciences, and she talked honestly about the challenges it faces, but by 2018 the council will have lost two thirds of its discretionary spend. That is a very real threat to the city’s ability to make the most of the opportunities it has.
Andy Sawford
The hon. Gentleman has virtually made two speeches, given his 20 interventions, so I am sure that he will understand if I reply to the points that have been made rather than giving way.
My hon. Friend the Member for Birmingham, Edgbaston said—I paraphrase—that it would be to the Government’s lasting shame if they do not do what they can to create the conditions in which Birmingham can succeed. It is our intention to create the conditions in which all our great cities, and all our great counties and metropolitan unitary areas of our country, can succeed. We want a devolution deal that will give opportunities to all areas of our country.
My hon. Friend the Member for Birmingham, Northfield (Richard Burden) talked about a particular issue in his constituency: school crossing patrols. I congratulate him on his campaign. I will not run down his campaign in the way that we heard the Secretary of State disappointingly has done. My hon. Friend has found a positive way forward to try to keep children in his constituency safe, and he should be congratulated on that, as should Birmingham city council.
My hon. Friend the Member for Hammersmith (Mr Slaughter) told us that in just nine months the council has set up a hospital unit to defend hospital services, saved Sulivan primary school, invested in affordable housing, funded police officers, backed the voluntary sector, cut the proposed Tory rent rise, taken action on food poverty, saved the local theatre and backed cycling—I have to say that it could soon be my favourite council, second only to Corby borough council. My hon. Friend made a powerful case for the great things that Labour councils are doing against a background of higher cuts than in Conservative and coalition areas across the country.
Having claimed that those with the broadest shoulders should bear the greatest burden, why have Ministers done the very opposite in local government? Since 1948 local government has been funded largely through a grant according to need, a principle that existed through successive Labour and Tory Governments. The idea behind it is very simple: not all areas of the country are the same; they have different needs; and it is good for our economy and our society to give the people of every area a fair chance of a good life. Decent local services provide the basis of that, so that whether a looked-after child is growing up in Newham, Newcastle or Northamptonshire, their needs will be met. The Government have argued that the old way of doing that, which strove for fairness, lacked incentives.
The Labour Government introduced the local authority business growth incentive scheme. The next Labour Government will let combined authority areas keep 100% of business rate growth. Incentives have a role to play, but it was wrong to freeze the grant at 2013 levels and engineer a complete shift away from redistribution. The ability of areas to take up the incentives and to replace lost grant with income from them varies enormously. We know that for all sorts of reasons, in the short term, from one year to the next, the chances of generating growth in some areas is much greater than in others. To compound the unfairness, the incentives being funded are from top-slicing the grant—a further raid on the resources of councils with the greatest needs. So when the Minister replies, will he say why he thinks it is right that the spending power of Wokingham will soon overtake that of Newcastle and Leeds, which have much greater needs?
On current trends, revenue support grant will disappear entirely by 2019-20. There is a real question about the future viability of local authority services, including statutory services. We can already see the impact of the cuts—for example, the impact of the cuts to social care on the national health service. A Labour Government will end the bias against areas with the greatest needs by ensuring that the funding we have is distributed more fairly. That means a settlement that works for all authorities in all areas of the country. That will include the new homes bonus, which was criticised by hon. Members, including the hon. Member for Newton Abbot (Anne Marie Morris). It takes money away from the most disadvantaged communities and gives it to areas where new homes would have been built anyway. That is the point. The new homes bonus is top-sliced from one year to the next. It is no basis for planning ahead.
We say to every area that a fair long-term approach will be best for every local council. That is why we are committed to longer-term funding settlements and multi-year budgets, so that local authorities can plan ahead, push ahead with reform and shift from high-cost ways of doing things towards investment in preventing problems, rather than paying for them later. There has to be a better way forward than taking a huge amount of resources from the poorest areas of our country.
At the same time, we will devolve significant powers and resources to all areas of our country—not just small-time agreements with a small number of cities, but large-scale devolution across our country. We will introduce a new model of decision making and new local accountability structures, like the local public accounts committee. Labour will put devolution at the very heart of the next Labour Government, with a new English regional cabinet committee.
Today we affirm our commitment that a Labour Government will move quickly towards fair funding. We reject the deeply unfair funding changes that this Government have imposed on local councils. Taking most from the areas with the greatest need is wrong and we will vote against the motion.
Stephen Williams
That would indeed seem rather odd on the face of it, but we are talking about the settlement now, not making projections about the future. What happens in future will be a matter for the next Government, in whatever configuration they are, and we will have to see where we are at that point.
Several hon. Members talked about additional resources for rural authorities. We recognise the challenges that those authorities may face in delivering services to their communities. My right hon. Friend the Member for Mid Dorset and North Poole and my hon. Friends the Members for Beverley and Holderness and for Newton Abbot (Anne Marie Morris) made a powerful case. We have listened, and that is why, for the ongoing settlement, we are adding £15.5 million for the most sparsely populated rural areas. My hon. Friend the Member for Beverley and Holderness said that poverty is found in rural areas as well as in urban areas. Indeed, the only area of the country that still has objective 1 funding from the European Union is Cornwall—not one of our big cities.
Mr Graham Stuart
I am grateful to my hon. Friend for his comments about rural areas. Labour Members have not said anything about unemployment. In the shadow Minister’s constituency, there has been a drop in unemployment of more than 60%. In Liverpool, Riverside, the figure is more than 45%. Contrary to what the hon. Member for Birmingham, Northfield (Richard Burden) said, long-term unemployment is also down in his patch. That is the reality that underlies this debate. That is what the Government are doing, though Labour Members said that there would be 1 million more unemployed. We have had to fix the mess that the previous Government left behind.
Stephen Williams
That is absolutely right. Contrary to the predictions made by the shadow Chancellor, in particular, that unemployment would sail to over 3 million and we would have disorder in the streets, it has in fact fallen dramatically, certainly in my constituency of Bristol West, where it is dramatically down on the 2010 figures.
We are providing an additional £74 million to support upper-tier authorities to help them to respond to local welfare needs and to improve social care provision. We have deliberately shifted the emphasis from keeping councils dependent on grant to providing them with the tools they need to grow and shape their local economies. For Britain to prosper, every part of the country needs to fulfil its potential. That will not happen if councils remain entirely dependent on Whitehall. We have set up a system that rewards councils that go for growth: those that are supporting businesses, attracting investment, and helping to create jobs. Councils that are open to new business will see the benefits of that growth through a retention of their business rates. Those that support new house building are rewarded through the new homes bonus. Many councils, of all parties, agree that these measures are having a positive impact on their ability to deliver better outcomes in their areas.
That is not all. Contrary to the impression that we are somehow drawing the heart out of local communities through this funding settlement, we have to see it in the context of resources that have been given to local areas. For instance, £12 billon is being given to local enterprise partnerships in England to spend on local economic priorities. Those growth deals will help to train young people, create thousands of new jobs, build thousands of new homes and start hundreds of infrastructure projects. We will have had six rounds of the regional growth fund, spending £2 billion helping innovative businesses to grow, and through the £90 million coastal communities fund, which also helps rural authorities, we are investing in jobs and growth in our coastal towns.
As well as growing their economies, the best authorities are transforming the way they do business. We are supporting them as they do so, achieving real savings and, importantly, improving outcomes for the people who use local services.
In November, we announced the latest round of successful bids to the transformation challenge award. We will provide about £90 million to support 73 projects that will improve services and ultimately save the public sector more than £900 million. Councils must demonstrate a readiness to learn from each other and from projects proven to develop change elsewhere.
We are committed to helping local places deliver more integrated local public services that improve outcomes for everyone. A good example of that is the better care fund in relation to health and social care. Initially we had hoped that £3 billion would be pooled locally, but we were pleased to see the figure increased to £5 billion. Several Members said that that was double counting, but that £5 billion, spent by the NHS and local government, is overseen by health and wellbeing boards, with local councillors taking the lead in shaping integration between social care and the national health service.
There can be no doubt that councils are rising to the challenge. Every council has issued a balanced budget this year. The majority of residents remain satisfied with the way their council runs things, which is testament to the great skill that authorities have shown; I pay tribute to them for all their efforts. Councils continue to have significant spending powers—as I have said, they have more than £112 billion this year—but they must satisfy local taxpayers that they are using every pound of their money to best effect to deliver efficient public services.
Finally, to rise to the challenge put down by the hon. Member for Birmingham, Edgbaston, I think that all three main parties in England are moving at different paces. My party probably got there first, in coalition, and our coalition colleagues have also embraced localism and regional growth. We see a strong future for local government—with cities driving their local economies and counties having the opportunity to do so, too—with more powers, more responsibility and an end to the situation where England is the most centralised state in Europe.
Question put.