Lord Foster of Bath
Main Page: Lord Foster of Bath (Liberal Democrat - Life peer)(11 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Diana Johnson
That is an interesting point. One of the issues the Government have to face is that they are using all sorts of different terms and ways of describing the funding that is going to local authorities. What I know is that in Hull the cuts are much deeper than they are in many wealthier areas. The citizens of Hull know jolly well that, with a Liberal Democrat-Tory Government, areas in the north are being disproportionately impacted.
Diana Johnson
I will not give way to the Minister because I only have a few minutes and he will have lots of time to peddle his view of what he believes is happening. It is clear that areas such as Newcastle, Manchester and Birmingham are being disproportionately hit.
Mr Gordon Marsden (Blackpool South) (Lab)
As the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis) who opened the debate moved to the apotheosis of a speech that, sadly, was rather shot through with bombast and self-satisfaction, he delivered the stirring words that putting councils in charge of their own destiny was the centre point of this local government statement. In the time allowed I would like to look at one council—my own council in Blackpool—and see what it has done to put itself in charge of its own destiny and how it has been affected by the way the Government have dealt with it.
As a small unitary authority, Blackpool is entering a difficult situation and difficult narrative due to Government cuts over the past two years. According to the multiple deprivation index, it is the sixth most deprived council in the country, and in that respect resembles a number of other seaside and coastal towns that have pockets of severe deprivation—such as the Minister’s council in Great Yarmouth, for example. Most of those areas, including many in the north, were hit badly by the removal of area based grants, which, as we have heard, were famously defended by a former Minister because most must be cut from those who have received the most.
Blackpool does not benefit from any dedicated funding because of the level of transience, and there is no acknowledgement in its health funding of the extra burdens placed on services by visitor numbers. On the heat register, Blackpool will lose an average of £215 per person over four years, and £83 over two years. My council has had funding cuts of 19.2% for the past two years. It has lost £40 million over the past two years, with approximately £14 million of further cuts in 2013-14 and approximately £20 million more over the next two years. I noticed that the Minister waxed lyrical about profligate councils sitting around with big reserves, but Blackpool council’s current reserve stands at £4 million, out of a proposed net expenditure budget for 2013-14 of £150 million.
Like many other councils we have heard about this evening, Blackpool has done many of the things that Ministers have preached should be prudent for local government to do. It has worked on ways to cut waste in a major way and cut a whole level of senior officers. Sadly, it has had to lose hundreds of posts and hundreds of jobs over the last two years, with 300 posts proposed to go this year. Blackpool has also frozen the council tax, but—of course, the Minister did not tell us this—that is on the basis of a grant of only 1% this year as opposed to 2.5% for previous years. Despite all that, Blackpool council has gone ahead with progressive measures, including moving towards a living wage for its workers and free breakfast clubs, so it does not need to take any lessons from Ministers about that. The cash reduction in this year’s Government settlement is £3 million. The council tax freeze grant, to which I have referred, means a further loss of £1.5 million, with demographic pressures from children’s social care of £1.1 million.
Let me turn to the council tax changes and the basis on which they are taking place. As we heard from my right hon. Friend the Member for Leeds Central (Hilary Benn), the shadow Secretary of State, millions of people in England on low incomes face rising council tax this year, including those who will now have to contribute to council tax who have previously been exempt. What will that figure of £410 million and a 10% cut in funding do for people in Blackpool? In Blackpool, it means a tax rise on a large number of people on low incomes. Like most seaside and coastal towns, we have people doing two or three part-time jobs, many of them women. We have larger than average numbers of older people and disabled people, which has specific implications for the amount that my council will now be forced to charge those who are not exempt, because this Government have decided that pensioners should be exempt from contributing to the council tax support scheme.
However, the more pensioners and older people an area has—it is a well known and established fact that large numbers of old people move into seaside and coastal towns—the higher the level of account that has to be placed on other people. Who are those other people? They are not the millionaires, who will receive a tax cut; they are people working hard on low incomes—carers, the disabled and single mums. They are people who are already being hit by the Government’s cuts in the uprating of benefits and working families tax credit. They are the people who will suffer and whom my council will not be able to protect from the depredations of this Government.
The Minister who opened this debate comes from a seaside town. He knows of some of these issues. Perhaps if he were to move away from the distorting mirror that he has had inserted in his little red ministerial box—
Mr Marsden
Well yours might be, but I am not sure about the Minister who opened this debate.
If the Minister got away from that distorting mirror and went back to his constituents in Great Yarmouth—to some of the houses in multiple occupation, the people living in bad private housing or some of those groups of his constituents who will be most affected—perhaps he would not come to this House with a speech so full of complacency and smugness.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
I agree with two things that were said by the hon. Member for Warrington North (Helen Jones). First, I agree that we do not have an opportunity to respond to all the contributions that have been made. If I do not manage to answer all the questions that have been raised, I will write to those who asked them, if that is possible. Secondly, I agree that this has been a passionate and largely well informed debate, which has demonstrated the existence of genuine interest in, and support for, the work done by all our local councils.
I fear, however, that the hon. Lady tended to be somewhat selective in her use of data. For example, she expressed concern about the education of less well-off pupils. What she failed to mention was that outside the local government funding settlement, the Government are providing significant additional funds through the pupil premium, and that the current amount will rise to £2.5 billion.
Mr Foster
No; others may wish to intervene.
I suggest that the hon. Lady is wrong in her analysis. I genuinely believe that the settlement is fair, but I also believe that it represents a watershed moment for local government. We have made it clear that it arms authorities with an average spending power of £2,216 per dwelling with which to protect services. We have also acknowledged that that is a reduction—a reduction in spending power of, on average, 1.3%. The hon. Member for Kingston upon Hull North (Diana Johnson) questioned which figures we should use. We are using the spending power figure because it is the figure that the Local Government Association asked us to use.
Concerns that the poorest councils would suffer disproportionately as a result of the settlement are simply wide of the mark. Hackney, for example, receives £1,700 more spending power per household than Windsor and Maidenhead.
Mr Foster
No, I will not.
In connection with last year’s settlement, the shadow Secretary of State was keen to cite the Audit Commission’s report “Tough Times 2012”. The report specifically states that “after the cuts”,
“Deprived areas in the north…the Midlands and inner London…still receive more government funding per resident than less deprived areas.”
I know that many in local government have shown great skill in reducing budgets. Committed local authorities have protected front-line services, and it is to the credit of councillors throughout the country that satisfaction with their services has risen, as is shown by a recent LGA survey. Some 72% of people polled were very or fairly satisfied with the way their council was being run. That is a tribute to the many town halls up and down the country that are working hard on behalf of their local people, and it shows what determination and innovation can accomplish in trying times.
My hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) made an excellent and thoughtful speech, and I join her in praising those councils. Those are the qualities councils will need in the months to come, because we all acknowledge that there are big hurdles ahead. It will be a challenging time. That is why today we have announced an additional fund of £9.2 million—the challenge award—to help those councils who wish to be even more innovative.
There will always be some who make cynical, politically motivated cuts to services rather than look to alternative approaches. Newcastle council announced it will slash its arts budget by 100% and shut down a swimming pool, yet neighbouring Gateshead—also Labour-run—and nearby Lid Dem-run Northumberland are both facing bigger percentage cuts but are not doing anything so draconian. Let us be clear, therefore: anyone who sacks a member of staff or shuts down a public service for political purposes is a disgrace to politics and a disgrace to Britain.
The truth is that the majority of authorities are doing their best in challenging circumstances. Portsmouth council, for instance, has invested £4.5 million over the past two years in adult social care, while keeping libraries, play centres, youth centres and museums open, and it has also played a key role in building more affordable homes. I note in passing that in the last two years every Liberal Democrat-controlled council has frozen its council tax, because helping council tax payers, whose council tax rocketed under Labour, is crucial.
Several hon. Members
Mr Foster
I will not give way now.
Not only are this Government helping people by reducing their income tax; we are also helping them by keeping their council tax down. Interestingly, the shadow Secretary of State did not mention that issue. As my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) said, the right hon. Gentleman’s speech was full of huff and puff and dated thinking. It was the same old mantra from Labour: nothing about protecting council tax payers from the huge rises they suffered under the Labour Government; nothing about finding more efficient and effective ways of delivering services, as many authorities are now doing; and nothing about the real opportunities provided by the business rate retention scheme. Helping local economies to grow means more money will flow into the local council.
The shadow Secretary of State asked a number of questions. He asked why the business rate baseline had been based on two years, not the five years we originally proposed. The answer is simple: we consulted and that is what the Local Government Association asked us to do. He asked what we are doing to help councils with the potential impact of business rate appeals. Again, we listened to local government, and then agreed that the costs could be spread not over one year, but now over five years, and we reduced by 8% the anticipated income and we have introduced a safety net for those whose income falls below 7.5%.
I was surprised that the shadow Secretary of State again attacked what he called the bedroom tax and failed to mention that the same approach was adopted for 13 years by the Labour Government. [Interruption.] He failed to mention that 390,000 households—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We must have a little more order. It is very hard to hear the Minister, and it is important that all Members can listen to what the Minister has to say.
Mr Foster
My point is that the shadow Secretary of State failed to mention that 390,000 households have two or more spare bedrooms, while 278,000 households are overcrowded. However, I will give him some credit for getting up to date in one area. Last September, he came out in support of Manchester council spending nearly half a million pounds on a single Alicia Keys concert, so he is at least ahead of the Secretary of State in that he knows who Alicia Keys is, and I give him credit for that.
The Government have already done much to help local councils by giving them increased freedoms to help them meet the needs of council tax payers. In Monday’s debate, the hon. Member for Derby North (Chris Williamson) said that
“Labour’s policy is to give a fair deal, a new deal, for local government and to allow local government on the ground to determine the shape of local government, rather than it being imposed from the top.”—[Official Report, 11 February 2013; Vol. 558, c. 676.]
That certainly was not the policy of the Labour party when it was in power. Central Government’s stranglehold over local government got ever tighter then, but perhaps he is right and Labour has seen the error of its centralising ways. While the Opposition debate a new approach, we are delivering a new approach. We have already provided greater borrowing flexibilities, a general power of competence, the removal of numerous ring fences, and increased flexibilities in the decision-making process.
Mr Graham Stuart
Will the Minister please give us an answer to the questions on rural funding?
Mr Foster
I am happy to do so, and I congratulate my hon. Friend on his lobbying campaign. The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) has given a clear answer to him, to my hon. Friends the Members for North Devon (Sir Nick Harvey) and for North Cornwall (Dan Rogerson), and to others: we are a listening Government, the Under-Secretary’s door is open and he will continue to listen.
The key change that has occurred in this budget which has almost totally been ignored is the one to allow local councils to retain a key proportion of business rate, giving them the real opportunity, for the first time, that if they work with the local business community to help get growth in that community, they will get a real-terms reward. This is a fair settlement and it is a settlement about opportunity. We are talking about opportunity through the new homes bonus, through the business rate retention scheme and now through our new challenge fund. We believe that the majority of local councils are up to the challenge, and those who take on that challenge will have our full support.
Question put.