John Denham
Main Page: John Denham (Labour - Southampton, Itchen)
Mr John Denham (Southampton, Itchen) (Lab)
Force of habit, Mr Speaker.
I beg to move,
That this House regrets the decision of the Government to introduce £1.165 billion of cuts to local government funding in England in the current financial year; regrets the Liberal Democrat members of the Government supporting cuts they opposed during the general election campaign; notes the promise in the Coalition Agreement to “ensure that fairness is at the heart of those decisions so that all those most in need are protected”; regrets that this programme of cuts fails to meet this test of fairness, as they fall disproportionately on the hardest-pressed communities; notes with concern the principle set out by the Parliamentary Under-Secretary of State on 10 June that “those in greatest need ultimately bear the burden of paying off the debt”; condemns the failure of the Secretary of State to tell the House or local authorities where £504 million of cuts to funding will fall; further regrets the failure to consult local government on the allocation of the cuts; further notes with regret that the Government’s further decisions on the Future Jobs Fund, housing and support for neighbourhood policing will weaken the ability of local councils to shape and deliver services in their areas; regrets the failure to make any progress on implementing the previous administration’s commitment to Total Place, enabling local authorities to deliver real efficiency savings and contribute to reducing the deficit while protecting frontline services; and resolves that decisions affecting local government spending should be based on the principles of fairness, protection of frontline services and promotion of growth.
I was interested to hear the earlier exchanges about Ministers not turning up for debates. May I say how disappointed I am that the Secretary of State for Communities and Local Government has not bothered to turn up for this one? In 10 years as a Minister, I always respected the strong convention in the House that if a shadow Secretary of State chose to lead an Opposition day debate, the Secretary of State would respond. I am very disappointed that, on the first Opposition day debate on a Communities and Local Government topic, the Secretary of State could not be bothered to be here. The truth is, of course, that he is too scared to be here. He is too scared to explain the series of blunders that he has already made over these cuts. He is so scared of defending what he is doing that he prefers to treat the House with disdain. So we shall have to make do with the Minister for Housing, the right hon. Member for Welwyn Hatfield (Grant Shapps) instead.
I remember when my right hon. Friend the Member for Wentworth and Dearne (John Healey) and I insisted that building firms who took public money to build social housing should train apprentices. When they did so, the current Minister described it as ludicrous and counter-productive. We have all seen the minutes of his meeting with the Prime Minister’s adviser on local government, the leader of Hammersmith and Fulham council, at which it was agreed that it was a priority to raise rents in the social sector to equalise those between social housing and the private sector. So we know where he is coming from—he has got form.
Mr Andy Slaughter (Hammersmith) (Lab)
I have something of an interest in what goes on in Hammersmith. I heard the Minister for Housing say from a sedentary position that he was not at that meeting. Perhaps he would like to clarify that, because my understanding is that he was not at the main part of the meeting, discussing the demolition of council estates and the ending of social tenancies—although he has learned the lesson and is now proposing to do just that—but he did get there for drinks and canapés at the end.
Mr Stewart Jackson (Peterborough) (Con)
While reflecting on the past, would the right hon. Gentleman like to apologise for the unprecedented situation that occurred when he was Secretary of State and his own permanent secretary disavowed the key policy of unitary status for various areas? The permanent secretary had so little faith in that policy that he went public with his view that it was a waste of public money.
Mr Denham
I am sure we all wish the former permanent secretary at my Department well in his new position as permanent secretary to the Scottish Government. I took the right decision on Norwich and Exeter, and I was right to back the desire of those cities to run their own affairs. It was a decision that I reached after many months of careful consideration, along with my right hon. Friend the Member for Wentworth and Dearne. I have to say that it was all too typical of this Government that, within two days of the new Government being formed, the Secretary of State—who talks about localism—decided to quash the aspirations of those councils to run their own affairs, in a timescale that meant that he could not possibly even have read the evidence that had been submitted by so many councils. I will return to the attitude of the Secretary of State in due course.
On 10 June, the Secretary of State announced £1.165 billion of cuts in local government spending in England in the current financial year. Because those cuts were so big, the Secretary of State should have come here to defend them. They were part of the £6 billion of cuts proposed by the Tories during the election. We opposed them as too early and too damaging to economic recovery. The Liberal Democrats also opposed them. As the right hon. Member for Eastleigh (Chris Huhne)—now a Liberal Democrat Cabinet member—said during the election campaign:
“If we took Tory advice and cut spending and raised taxes precipitately, growth would stop. Unemployment and benefit spending would rise further. Tax revenue would stall.”
But now he has taken Tory advice, and he will be held to account for what happens.
Now the Lib Dems support these cuts, and their credibility as a progressive alternative to the Tories is shot to pieces. These are cuts that no local council had any chance to prepare for, coming as they do well into the financial year. As the Tory leader of West Berkshire council told us,
“This is unprecedented. We have never faced cuts in the middle of the year.”
As the Tory leader of Telford said,
“this is money that we had planned to spend this year and will now have to be cut.”
Toby Perkins (Chesterfield) (Lab)
My right hon. Friend is right to be furious that the Secretary of State is not attending the debate. The Secretary of State seems to see himself as some sort of Conservative John Prescott. Does my right hon. Friend share my feeling that that fine gentleman would have been proud to stick up for his Department instead of letting it take the majority of the cuts, and would have come here to defend his decision rather than skulking off to the scene of former crimes?
Mr Denham
My hon. Friend makes a good point. Despite some apparent superficial similarities between the two gentlemen, one thing is clear: John Prescott never ran away from a debate or argument, unlike the Secretary of State—[Interruption.] I did not say he never ran away from a fight; I just said he never ran away from an argument.
The truth is that the cuts were not only made too fast, but made without consultation. There was no discussion with local councils about whether or how they could be made. The Local Government Association initially put out a press release welcoming the fact that it had been promised consultation, but ended up sending a desperate letter two weeks later saying, “Will you please tell us what’s going on?” The cuts came ahead of the Budget, which sets out cuts of 25%, 30% or 35% to local council services.
Graham Stringer (Blackley and Broughton) (Lab)
Does my right hon. Friend agree that the basis of the cuts is simply party political prejudice, which is why they were done so quickly? Otherwise, how could deprived Salford have twice the rate of cuts of affluent Trafford?
Mr Denham
My hon. Friend makes two important points, both of which I will deal with, about the unfairness of the cuts and the real agenda l behind them. Of course the deficit needs to be tackled, and we set out our plans to reduce it by more than half over four years. That was a tough enough target, but the cuts now laid out go much further than we would have gone; they go much faster than we would have gone; and are being done in ways that we would not have chosen.
Joan Walley (Stoke-on-Trent North) (Lab)
Does my right hon. Friend share my concern that the cuts will be felt disproportionately in heartland areas that have suffered a great decline in manufacturing, such as Stoke-on-Trent? I am particularly concerned about their impact on the Supporting People programme and the money providing care for people in the community. How can we plan for that?
Mr Denham
This is an important debate. The way in which the Secretary of State is handling these first cuts warns us all of what lies ahead and the unnecessary damage that will be done to the local services on which the people we represent rely. When he made his cuts, he had choices to make about how to make them—to make them fairly, or not to make them fairly. So let us remember the promises that the right-wing coalition made:
“We are all in this together. I am not going to balance the budget on the backs of the poor”,
said the then shadow Chancellor, now the Chancellor of the Exchequer.
“Our core aim is to hard-wire fairness back into national life”,
said the Deputy Prime Minister during the election campaign. The right-wing coalition document states that
“we will ensure that fairness is at the heart of those decisions so that all those most in need are protected.”
So what did the Secretary of State do?
Let us take two boroughs next door to each other in the same conurbation. One is 15th in the deprivation index; the other 178th. One has 27,000 people on housing benefit; the other has 13,000. One has 11,000 unemployed people; the other has 8,000. One has an average weekly income £40 below the other. One is poor; the other comfortable. So what does “We are all in it together” mean? Which one gets the bigger cut under the right-wing coalition? The poor one, of course! Salford loses twice as much as Trafford. And that is not an isolated example. According to the Secretary of State’s own figures, Newham, the sixth most deprived borough in the country, loses £4.6 million, while Richmond, the 309th most deprived borough, loses less than £1 million. In the Prime Minister’s district council, there will be no cut. His county of Oxfordshire, which has a deprivation index of 10.85, gets a cut of 0.7%.
If we look at the Deputy Prime Minister’s area, we see that Sheffield has a deprivation index of 27.8 and a 1% cut—perhaps the real price of coalition. As for the councils losing the highest proportion of the their income, they are in places that have been left behind—the Lancashire mill towns like Burnley, the ex-coalfield areas like Ashfield and the struggling seaside towns like Hastings. Among the metropolitan boroughs, it is the poorest that lose most. Why? Because it is what these Tories and Liberal Democrats believe in. As the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill)—who I see is not here to answer this debate either—said at oral questions with refreshing honesty:
“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]
The poor will pay most, and that is what this right-wing coalition is all about.
Andrew Percy (Brigg and Goole) (Con)
The right hon. Gentleman cannot honestly defend the previous funding regime that saw authorities such as mine in East Riding receive hundreds of pounds less per pupil than those in neighbouring Hull. Is he suggesting that he wants to have cuts dished out to authorities that are already disproportionately doing badly out of the funding, which would mean deprived pupils in my area doing even worse than deprived pupils in neighbouring authorities?
Mr Denham
There is the true voice of the Tory shires. The truth is that the local government funding formula—widely debated, widely discussed, widely consulted on—does give a weighting towards those areas with the highest social need and the highest deprivation, because the challenge of delivering services in those areas and of bringing about the equality of outcomes that we should all seek is greatest there. I do defend that. I do defend programmes like the working neighbourhoods fund, which has been targeted by this coalition Government, and through which money has of course been spent in areas of higher worklessness. It is because of that that those areas saw more people coming off incapacity benefit as local authorities used that money to help get people off benefit and into work—something we hear so much cant about from Government Members. So I say to the hon. Gentleman, yes, I do defend that approach.
Clive Efford (Eltham) (Lab)
Is my right hon. Friend aware that during the opening of yesterday’s debate on the Budget, in an exchange about cutting benefit to the long-term unemployed who are seeking work, the Secretary of State for Work and Pensions referred to pensioners living in houses that were too big for them and that they were unable to look after. Does that not give away what is really behind these benefit changes—that the pensioners and the poorest in our communities are going to pay the price?
Richard Burden (Birmingham, Northfield) (Lab)
Does my right hon. Friend agree that another area where the coalition’s words are just not matched by its actions is in the talk about big societies and strengthening civic society? The reality of the cuts in Birmingham is a slashing of grants to those very voluntary organisations that our city relies on to provide the services that supplement those of the local authority and statutory agencies, which ordinary people need.
Mr Denham
I have some sympathy with my hon. Friend, as I have been involved at a local level in working the voluntary sector’s Shopmobility scheme, which the local Conservative council wanted to cut. Here was an organisation that had only a small amount of public money but engaged huge numbers of volunteers, enabling thousands of people to get around the town centre. It is funny, is it not, that that should be the Tories’ first target, despite all the talk about the big society?
Mr Denham
I shall give way again in a few moments, but I want to make a little progress.
What is quite clear is that all this is not an accident; it reflects the values of the coalition. I have talked so far about the Secretary of State’s figures. When he published the written ministerial statement, he said with great flourish that no council would lose more than 2% of its budget this year. That is bad enough; it is not trivial. It feels about 30% worse than that, however, if we take into account the cuts implemented from today. By the time most councils have been able to put cuts into practice, it is going to feel like twice that level of cut.
The truth is far worse, because the Secretary of State consciously withheld the true situation from the House. In the figures that were published, over £500 million of the £1.16 billion of cuts was not allocated to local authorities, so no one could tell what the impact would be: it was kept secret—kept under wraps, kept from this House. A few days before, the centralising, dictatorial Secretary of State had instructed local authorities, under threat of punishment by law if they refused, to publish details of every item of spending over £500. As his hapless Minister told the House, no one had even bothered to work out what that would cost local taxpayers; it was just another diktat from behind the big man’s desk. Yet the same Secretary of State who can tell councils what to do down to the last £500 could not manage to tell this House or local councils where he was cutting £500 million. It is ridiculous.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Does my right hon. Friend agree that the current cuts in local government belie any notion of fairness or progressiveness? The London borough of Tower Hamlets is the third most deprived borough in the country yet it faces one of the largest cuts: £9 million, of which £1 million is from the working neighbourhoods fund. That is in addition to a likely £55 million of cuts over the next three years. We should compare that with the figure of £1.3 million for the London borough of Richmond upon Thames, which includes the seat of the Secretary of State for Business, Innovation and Skills, the right hon. Member for Twickenham (Vince Cable). How is it possible that the poorest have to suffer so much compared with one of the richest boroughs in the country?
Mr Denham
My hon. Friend makes a very good point, and also underlines the point I am about to make, because on the original figures published by the Secretary of State, the Tower Hamlets cut was nowhere near as big as that. Earlier, I used the example of Newham, for which his table gives the figure of £4.6 million, which was the biggest cut in London. Now that the dust has settled, however, we find that Tower Hamlets is up there as well, with a figure of about £9 million, and Hackney loses £8.6 million—but as my hon. Friend said, “Don’t worry, because Richmond is still doing all right.”
Dr John Pugh (Southport) (LD)
I rise to say a few words in the interests of fairness, because the right hon. Gentleman obviously thinks that, apart from eating babies, there is very little the coalition does not do. Can he tell us which of the £40 billion of unallocated cuts the Labour party was likely to implement were going to fall on local government? That would be a transparent, open, rational and reasonable thing to do.
Mr Denham
The hon. Gentleman needs to explain something to his constituents: why he is supporting a cut that goes tens of billions of pounds deeper than the plans we set out. That is what is causing the pain. During the election campaign, he opposed the cuts I am talking about. He and his party colleagues said that these £6 billion of cuts would damage the economy. He is the one with questions to answer for his constituents, such as how he managed to run an election campaign against a VAT increase and these cuts, yet here he is standing up in the House defending the cuts—and no doubt in due course defending the VAT increase as well.
Sajid Javid
I thank the right hon. Gentleman for giving way. Why does he treat Members as if they are fools? If he wants the truth, it is that his Labour Government’s funding formula was based on petty party politics and had absolutely nothing to do with the needs of individuals. If we want to use examples, the schoolchildren in my constituency of Bromsgrove get £900 less per annum than those in neighbouring Birmingham. The reason for that is very simple: over the past 13 years areas where there are Labour voters got far more money, and the truth is that what we are doing is, in this terrible economic climate, restoring some fairness in the system.
Mr Denham
I think the whole House should take full note of that intervention, because the statement of principle we have just heard from the hon. Gentleman flies in the face of the commitment made during the general election by the then shadow Chancellor, now Chancellor, who said:
“We are all in this together. I am not going to balance the budget on the backs of the poor.”
We have now heard the authentic voice of the Conservative party, however. Irrespective of any economic challenges faced by this country, the Conservatives would have wanted to hammer the poor, and that is what they intend to do. It will not come as any surprise to Labour Members to know that that is what the Tories stand for. What the Liberal Democrats are doing supporting it, I have no idea.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
Does my right hon. Friend not agree that the interventions he has just taken from the hon. Members for Brigg and Goole (Andrew Percy) and for Bromsgrove (Sajid Javid) both demonstrate that the coalition is intent on redistributing grant away from the poorest boroughs and the poorest education services and towards the better-off? Does that not completely give the lie to the idea that the so-called pupil premium will put more money back into the very boroughs and authorities that those Members have just attacked?
Mr Denham
My right hon. Friend, as always, is absolutely right.
I must say that this debate is turning out to be rather more useful than I expected. Just a small scratch on the surface of the Government’s supporters tells us what they really believe, stand for and intend to do. As a number of Members have said, this has got nothing to do with the economic crisis or the deficit; they just think that our spending more money in the areas of greatest need was the wrong thing to do. Let us agree that that is the difference between the Government and the Opposition.
Hazel Blears (Salford and Eccles) (Lab)
I wonder whether my right hon. Friend is experiencing, as I am, a slightly spooky feeling of déjà vu. If we think about political gerrymandering, we all remember the days when Westminster and Wandsworth were able to levy zero council tax because of the fix that had been done on the allocation and distribution of grant. What we are seeing from Government Members is history replaying itself. We are seeing not a new, centrist, Cameron-friendly Tory party but the same old right-wing Tories, determined to balance the books on the backs of the poor.
Mr Denham
My right hon. Friend is right. She too has done the job that I did until the election, and she knows that there are many people in local government who are not of our party, but who have a genuine commitment to the communities they serve and by whom they were elected. Among the people who have been kicked in the teeth by these budget cuts are the locally elected representatives of this Government. The Tory leader of Blackpool council said:
“We are one of the most deprived areas in the land and we shouldn’t be singled out like this.”
He had better not go to the East Riding or Bromsgrove, because he will get a different message. He continued:
“I understand that some of the leafy lanes of Surrey and places have got away with it; well that can’t be right.”
The Lib Dem leader of Burnley council said:
“we are a deprived borough but once again we are suffering. I am disappointed and sick of us being kicked by budget cuts in Burnley.”
Andrew Gwynne
I am grateful to my right hon. Friend, who is making a very good case. Is he as surprised as I am that members of Liberal Democrat-controlled Stockport council, who were extremely vocal in the run-up to the election about the fact that their grant settlement was not enough, have not uttered a single word of protest at the cuts now being forced on them?
Mr Denham
If I may, I will just complete the point I was making by giving one last example.
We were told that there would be a 2% limit on cuts; however, Corby council faces a cut of 15% in one year, because the figures did not include the housing and planning delivery grant. Corby council did the right thing: it gave planning permission for houses and economic development—and now it has had to pay for that with a 15% cut. I now give way to the hon. Member for Croydon Central.
Gavin Barwell
I am very grateful to the right hon. Gentleman for giving way. He is trying to make the point that the previous Government allocated money on the basis of need. Does he recognise that the result of the introduction in 2006-07 of the fourth block into the funding formula, according to the London Councils report, has been a shift in local authority funding
“from a relative needs basis towards a per capita basis, causing an arbitrary redistribution in funding between high-need and low-need authorities”?
That is the result of the policies his Government introduced, and he did nothing to correct those decisions.
Mr Skinner
Does my right hon. Friend agree that we should not be too surprised at what this Tory Government are doing to shift the balance towards the wealthier areas of Britain, because every pit in Bolsover was shut by the previous Tory Government, throwing thousands of people on to the dole and creating deprivation that hitherto had not existed? Now the Tories are doing it again, but there is a difference because this time they are doing it under the cloak of so-called “respectability”, using those tinpot Liberals to cover for them. The Liberals will undoubtedly have to pay for it at the end.
Mr Denham
My hon. Friend is absolutely right about that. One of the things that we need to recognise is that, sadly, in large areas of the country, particularly in my own area of the south, as well as in the south-east and the eastern region, local government has for too long been divided between the Tweedledum of the Tory party and the Tweedledee of the Liberal Democrats. The Liberal Democrats have often got away with claiming that they were a progressive alternative to the Tories, but that will no longer be allowed to stand. Somebody has to speak up for the people of the areas suffering cuts, and it will be the Labour party.
John Hemming (Birmingham, Yardley) (LD)
There are perhaps two arguments here. One argument is about whether the cuts should be made now or later, and the other is about how they should be allocated. My personal view is that we must ensure that we fund local authorities on a needs basis—there is no question about that. The basic questions in this debate are about whether or not cuts should be made earlier and whether the quantum should be the size it is. If we do not do this, the interest rates will be higher. If we follow the Labour party’s advice, we will actually have greater cuts because we will have to pay a higher interest rate on a higher level of debt. That is the fundamental truth of this argument, so the right hon. Gentleman is arguing for greater cuts in the long term.
Mr Denham
No, I am not going to give way, because it was not worth it last time. The hon. Gentleman spent an election campaign saying that the cuts should not be made now, but he has spent every week since the election saying that they should be. That is ridiculous and he cannot expect to be taken seriously.
Ms Louise Bagshawe (Corby) (Con)
When I was in my office, after a meeting, I heard the right hon. Gentleman take the name of Corby in vain. May I point out to him that the cuts allocated to Corby borough council are merely 1.1%, which puts it in the lower half of councils receiving cuts? Is the shadow Minister aware that Pat Fawcett, the Labour leader of Corby borough council, complained bitterly at the funding settlement that Corby received when his Government were in power?
Mr Denham
I should make some progress, because I have further important points to make to the House—unfortunately, the Secretary of State is not here to defend his case. When he made his announcement, he tried to sweeten the pill by promising local councils greater freedom in spending what was left of their money; he said that £1.7 billion would be taken outside the local government ring fence. That was fair enough, because that is the same direction of travel that the Labour Government had set and I am not going to argue with it, but what has happened since? This Government have now been forced to admit that it was all a mistake and that the figure was not £1.7 billion after all, but £1.2 billion, so we have another disappearing half a billion pounds. How could that be? The truth is that the Secretary of State and his Ministers are not on top of their brief, and they do not understand how local government finance works or where the money goes.
All that would be bad enough, but that is not all. What is being revealed bit by bit is this Government’s limited vision of local democratic government. The country faces a major challenge as we and the world recover from a global recession, and effective, democratically accountable local government must be part of the solution, not part of the problem, but it is now clear that this right-wing coalition does not understand how important local government must be.
It is not just about the unfair cuts, the impact on front-line services and the impact on growth. It is quite clear that there is no decision too small for the Secretary of State to intervene in. We wanted local councils to be able to decide whether planning powers should be used to control the spread of houses in multiple occupation and to let them decide what was best for local people, but now the Secretary of State is tearing up those rules. Who is going to decide what is best for local people? He is. We wanted local councils to have a say in the big planning decisions that affected more than one district. Who will decide now? The Secretary of State. He wants to set the council tax in every council, how often the bins are collected and how often councils can communicate with the public. He imposes cuts from the centre and will not talk to local councils about how to do it—no wonder he will not turn up to speak in the House. Remember the power of general competence? Remember the Prime Minister, when he was Leader of the Opposition, saying that councils would be free to do whatever they like as long as it was legal? That did not last long under this Secretary of State. He needs to learn that there is a lot more to localism than sitting behind a desk in Whitehall giving orders to local councils.
Councils need to be leaders, shaping and delivering services in their area. Under Labour, councils were better financed—we reduced ring-fencing and targets and believed that local councils were often best placed to decide what was best for local people. Labour local councils had the lowest council taxes and Tory councils had the biggest increases. We trusted councils to deliver the things that local people wanted. That is why local councils were the right vehicle to deliver the 18 million free swimming sessions for pensioners and kids that will now be scrapped. The views of the Tory leader of Derby council will be shared by many. As he said:
“The withdrawal of funding for the free swimming scheme is very disappointing because we consider this to be a resounding success in Derby.”
It was our belief in local government that made us see why local councils should take the lead on council and social housing and in supporting the Kickstart schemes, all of which are now on hold or scrapped. That is why local councils were the right people to lead in tackling worklessness, and why so many local councils, including Tory councils such as Kent and Hampshire, were big bidders for and big users of the future jobs fund. They could see that it was right to offer real jobs to young people in their communities. Now, up to 80,000 jobs for young people will be lost.
We trusted local councils—Tory, Lib Dem and Labour. Yes, sometimes they let us down. I remember when the Tory-Lib Dem coalition in Birmingham failed to spend its working neighbourhoods fund money; perhaps we should have realised that that was the shape of things to come. However, many other councils repaid that trust many times over.
It was right that local councils led on Building Schools for the Future. There are now 750 schools in 90 local authorities whose schemes are on hold and in doubt.
Alison Seabeck (Plymouth, Moor View) (Lab)
My right hon. Friend has set out in an extremely worrying way the effect of this right-wing Tory-Liberal Democrat coalition and of its cuts. Does he acknowledge that the coalition has not in any way flagged up the potential savings before going straight into the cuts programme? The Total Place project was one through which Tory councils in London and elsewhere said that they could make significant savings of tens of millions of pounds, yet there has been no mention of it from the Government. Will my right hon. Friend comment on that?
Mr Denham
My hon. Friend is absolutely right, and I shall move straight to that point. It is very clear that the right-wing coalition is handling these cuts in a way that is creating much deeper damage than is needed. My hon. Friend should not be in any doubt: cuts would have had to be made under our deficit reduction programme. They would not have been as big or as fast, but difficult decisions would have had to be made none the less. There are big efficiency savings to be made, many of which were set out in the report that we published before the election, written by Sir Richard Leese, leader of Manchester city council, and Sir Steve Bullock, mayor of Lewisham. They set out very clearly the savings that could be made from sharing services, sharing staffing and reducing layers of management, but those changes need to be properly planned and implemented consistently over several years, always putting citizens first. The Government’s approach of badly planned, short-term, unfair cuts and arbitrary suspension of key investment makes efficient savings impossible and ensures that the cuts will fall on front-line services and their users, not on the back office.
In government, we recognised—this was the point that my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) made—that the only way to make the best use of local public service spending was to look at it as a whole. We need to look at all the money spent on children, older people, offenders and drug and alcohol problems as a whole. Rather than worrying at the outset whether it is police money, health money, school money or council money, we need to look just at how best to use it.
We know that the most expensive children—the ones who are disruptive at school—are often those whose families are of most concern to social services. They cause the most nuisance to local people and the police and they probably have the highest need of adolescent mental health services. So we worked with local government and the Local Government Association to show that we could produce better services much more efficiently if we brought together all the money that is spent on that group. Our Total Place pilot showed that when we do that, we get a better service at lower cost.
The LGA says that government as a whole could save £20 billion over five years. I am cautious about the details behind that figure, but it is significant. That is what councils think they could offer to cut the deficit while protecting front-line services. That should be taken seriously.
Mr Betts
I completely agree with my right hon. Friend’s analysis of Total Place. It is a way forward; it is not going to deliver immediate savings, but with proper planning it could deliver. However, it cannot be delivered properly through central diktat from the Secretary of State. If improvements are to be delivered, there has to be a real transfer and devolution of power not merely from the Department for Communities and Local Government, but from the Department for Transport, the Home Office and all other Departments, to allow local authorities to take the lead at local level.
Mr Denham
I agree with my hon. Friend, and I welcome him to his position as Chair of the Select Committee on Communities and Local Government, to which he will bring considerable experience and knowledge. That is exactly what we offered local government and local services in our last Budget, which offered a wide range and scope for local services to pool their money and use it in new ways. That is why I was confident that we could both deliver our deficit reduction programme and protect front-line services, but as my hon. Friend says, it can work only when it is backed from the top. There is no mention of it in the Budget or in the Red Book, and every Government policy works against that sensible, coherent approach. The Government are not just slashing local spending: they are fragmenting it. There is no point in giving councils more and more control over disappearing funds if, at the same time, school spending is disappearing into academies and free schools, if the chance to work with health money disappears into hundreds of GP budgets or if police funding rides off into the sunset with an elected sheriff. [Interruption.] I am sure that the hon. Member for Meon Valley (George Hollingbery) is right. I shall come to him in due course.
I do not know whether the Secretary of State simply lost all those arguments or whether he never made them, but he has not done well. I shall give way now to the hon. Member for Meon Valley and later to the hon. Member for Mole Valley (Sir Paul Beresford).
George Hollingbery
I am very grateful to the right hon. Gentleman for giving way. First, I make the point that in 13 years of Labour rule, there was little or no integration across local services. Indeed, we could honestly say that silos grew a great deal more than they merged together. We do not need central rules to make that integration happen; in Hampshire, we have Project Integra and PUSH—the partnership for urban South Hampshire—so he will know that there is plenty of co-operation at local council level.
On central control, does the right hon. Gentleman agree that when Winchester city council, of which I was a member for 11 years, made an assessment of the amount of spending it could control under the last Labour Government, it was below 5% of total spending?
Mr Denham
It is useful to have a discussion with a Hampshire MP, as we are both familiar with PUSH, but this is exactly my point: that partnership is very good and very important, but it is limited to the powers held by the local councils. Until those councils are able to help to lead and shape health spending and law and order spending in the area, we will not get the changes that we need.
The hon. Gentleman’s second point is also reasonable, but he overstates it. He calculates that Winchester council did not have the budget for Winchester university—well, no, but nor should it. Winchester council did not have the budget for Winchester prison, or for the benefits bill in Winchester. Not every piece of spending is amenable to transfer to local authorities. However, together with local Government—particularly over the past few years—we did set out that stronger vision for local government. I am desperate that we should not lose that vision, and not just for the purpose of a party political debate here.
The integration of local services is critical now. If the Government prove me wrong I shall be the happiest person in the world, because we shall then have the chance to deliver front-line services that people want in a way that genuinely saves money. Every Member, on whichever side of the House they sit, should be interested in that debate.
Not so long ago, when he was Leader of the Opposition, the Prime Minister said, “If you want to know what a Conservative Government would look like, look at Conservative councils.”
I am happy to give way to the hon. Member for Mole Valley, if he still wishes to intervene. It seems that he does not.
What the Prime Minister said constituted a fair warning. As some of my hon. Friends have already observed, what we are seeing is not the unavoidable consequence of a global recession or even of a Labour Government. The aim of the Tories, limply propped up by the Liberal Democrats, is and always has been to roll back an effective, caring and active state. Their vision is of the budget airline council, the sink-or-swim council, the no-frills council, where town halls offer only the bare minimum of service and people must pay twice to get a good service. I think of councils such as Wandsworth, whose leader said that the council wanted to
“increase charges as far as possible beyond inflation...It is worth taking a trial and error approach”.
I think of councils such as Hammersmith and Fulham, which promise to protect the elderly and then hike up their charges. That council’s leader has said:
“To continue building and publicly investing in the ‘social rent’ template…makes no sense.”
I think of the Tory councils in London that want to knock down the homes of secure tenants and offer them insecure homes at a much higher rent, and of the threats to the future of secure council tenancies that the Minister for Housing has never denied. It is all there.
Yes, the country faces hard decisions as we recover from the global recession, but none of that justifies an ideologically driven attack on the basic idea of decent local services provided by well-run councils. We all know what the Tories are up to, but what are the Liberal Democrats doing supporting them? The answer is that they have sold their souls, and have forfeited the right to call themselves a progressive alternative to the Tories.