Local Government Funding

Maria Caulfield Excerpts

Wednesday 28th March 2018 Commons Chamber

[John Stevenson]

Will the hon. Gentleman give way?

[Maria Caulfield (Lewes) (Con)]

Will the hon. Gentleman give way?

[Andrew Gwynne]

No, I will make a bit of progress. [Interruption.] I have taken three or four interventions already and I am only on page two of my speech. A little bit of patience is perhaps needed from Government Members.

The fact is that for politicians of all political persuasions and none in local government, the sense of pride and responsibility is why many of us came into politics—to make our world a better place for the people we grew up with, our neighbours, our family and our local communities. It is therefore saddening that this debate is even needed today.

[Maria Caulfield]

Will the hon. Gentleman give way on that point?

[Andrew Gwynne]

I will just move on. The fact is that since 2010, local government has borne the brunt of the public spending cuts. Since 2010, 49.1% of central Government funding has been cut from local government—[Interruption.] It is interesting that the Parliamentary Private Secretary is giving his Back Benchers cue cards and whispering in their ears about what to say.

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[Andrew Gwynne]

Thank you, Madam Deputy Speaker. The hon. Member for Bath (Wera Hobhouse) is right that these cuts have gone far too far. Many of my constituents, though, will not forgive the Liberal Democrats for the part they played in pushing through the deepest austerity in the coalition Government. Many of those hard choices have resulted in some of the increases in demand that we are now seeing, particularly in children’s services and adult social care.

[Maria Caulfield]

Will the hon. Gentleman give way?

[Andrew Gwynne]

I will.

[Maria Caulfield]

I thank the hon. Gentleman for giving way; he is very generous. I understand his call for more funding for local government, but can he explain why Labour Members voted against the local government finance settlement, which gave councils more money?

[Andrew Gwynne]

Because it is a fact that the local government finance settlement went nowhere near the gaps that have been created by the hon. Lady’s party in local government. We do not support ongoing austerity. We want to ensure that we reinvest in our public services, and that is why I hope she will join us in the Lobby tonight. If she believes in defending public services and wants to see more money for our local councils, she can support our motion tonight, and I look forward to her being in our Lobby.

House building has fallen to its lowest rate since the 1920s and homelessness is rising. The number of people sleeping rough on our streets has more than doubled since 2010—[Interruption.] The Secretary of State can chunter, but I do not think that doubling the number of rough sleepers is a record for the Housing Secretary to be proud of. Older people are not living with the dignity and comfort that they deserve because of the cuts to social care. The outsourcing of public services has led to one scandal after another, and the collapse of private outsourcing companies such as Carillion has put services at further risk. Demand for children’s services is placing growing pressure on all councils. Central Government funding to support children and their families has been cut by 55% since the Conservatives came to office.

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[Sajid Javid]

I share the hon. Lady’s concern about the rise in homelessness. It is almost 50% lower than it was at its peak in 2003, but it is still too high, and she is right to point out that it has been rising. All hon. Members should be concerned about that. This is why it is important that we should continue to help those programmes that can prevent homelessness and those that can help those who find themselves in that difficult situation. She might be pleased to know that a recent pilot in Southwark of some of the measures that will be put in place across the country in April as a result of the Homelessness Reduction Act 2017, which had cross-party support, has resulted in a one-third fall in homelessness acceptances. I hope that those are the kinds of measures that we can all support.

[Maria Caulfield]

I tried to intervene on the shadow Secretary of State earlier to ask about Labour’s proposals to raise money for local councils through a land value tax, which is also known as a garden tax. Such a tax would see families whose properties were worth £300,000 paying an average of £4,500 a year. What is the Secretary of State’s view on those proposals?

[Sajid Javid]

I am pleased that my hon. Friend has raised that point. A moment ago, I talked about how Labour had brought our country to the brink of bankruptcy and how, given the chance, it would do it all over again. She has just illustrated that point. All that Labour knows is borrow, borrow, borrow and spend, spend, spend, and it wants hard-pressed taxpayers to pick up the bill. She mentioned Labour’s garden tax. It is interesting that the shadow Secretary of State did not want to dwell on that, but it appeared in Labour’s 2017 manifesto, and it was calculated at the time that it could result in a charge of £3,700 a year for the average home, which is roughly £2,000 more than the current band D council tax. That reminds me that the hon. Member for Derby North (Chris Williamson) was recently sacked from the shadow Front Bench for exposing Labour’s plans to double council tax. So the facts are out there, and my hon. Friend is absolutely right to raise that point.

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[Maria Caulfield (Lewes) (Con)]

I welcome the opportunity to speak in this debate, but is it not ironic that the very Members who called for this debate are those who voted against a real-terms increase for local councils in the local government funding settlement?

Let us look at some of the multitude of reasons why councils have tough funding decisions to make. East Sussex County Council, which covers my constituency, is a rural authority, and rural authorities have been significantly underfunded for decades compared with urban areas, something which was never addressed by the previous Labour Government. Rural authorities such as East Sussex receive 45% less funding per head of population. They get 41% less police grant and 32.4% less fire authority grant than urban areas. That is something that was never tackled under Labour but which this Government are looking at.

On need, East Sussex has the highest number of 85-year-olds in the country, and that puts pressure on our adult social care. The House should not be misled by southern areas being comparatively rich. I have some of the most deprived coastal regions in the country, with people earning 85% less than those in urban areas. There is real deprivation and real need in those areas, and the Government have come up with a solution. There will be an increase in the rural services delivery grant in 2018-19, meaning an overall increase of £81 million. That is the highest ever increase, delivered by a Conservative Government. The fair funding review is long overdue, and Labour Members should ask themselves why they did not do it when they were in government.

It is not just about the money that is being given; it is about the use of the funds that are available. When I talk to my constituents, they say that they want their local councils to deliver social services, to collect the bins, to build more housing, to fix the potholes and to get the schools into good and outstanding ratings, but let us look at what some Labour councils are delivering.

Bradford City Council recently spent £1.2 million on a swimming pool strategy that was ditched at the last minute, and it spent £15,000 on a new statue for the town centre. When Northumberland County Council was under Labour administration, it gave £1 million via its property development arm to Ashington football club, which was unearthed only when the Tories took over control last year.

We need to hold councils to account for the money that they spend, but it is not just money spent on pet projects that is often wasted. Figures revealed by the TaxPayers Alliance show that 539 senior council executives across the country earn more than the Prime Minister, and 2,314 senior council executives are on more than £100,000 a year— an 11% increase. Of the 10 councils that pay their executives the most, 70% are Labour controlled. Those councils are paying between £350,000 and £650,000 a year per post, which tells us where the money is being spent.

I welcome the increase in local government funding, but let us look at the record of Opposition Members. They voted against 60,000 young first-time buyers being exempted from stamp duty. Last week, they voted against 50,000 young children getting access to free school meals and, once again, we have seen them vote against councils getting more funding. Their actions speak louder than their words.

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[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I thank all Members who have participated in this debate. It is fair to say that local government finance is not always the thing that enthuses people, but what we have learned today is that finance is there for a purpose: to deliver essential public services—or, in the words of the Secretary of State, “vital services on which we all depend.” To be fair though, that is probably where the Secretary of State’s understanding ends. He gets the principle, but not the true impact of austerity.

The best preparation for this debate would have been completely wasted because it would have missed the gift that keeps on giving, which is that the Secretary of State’s testbed for local government seems to be the sinking of the Titanic—a vessel that went out 106 years ago not fit for the journey ahead, without enough life rafts for the people on it and completely misunderstanding that there was an iceberg ahead and the damage that it would cause. Now, Northamptonshire might be the tip of the iceberg in local government terms, but the truth is that many councils are really struggling beneath the surface.

We have heard from my hon. Friends the Members for Garston and Halewood (Maria Eagle), for Bradford West (Naz Shah), for Reading East (Matt Rodda), for Stockton North (Alex Cunningham), for Dulwich and West Norwood (Helen Hayes), for Bedford (Mohammad Yasin), for Glasgow North East (Mr Sweeney) and for Leeds North West (Alex Sobel). The thing that ran through all those contributions was the human and community cost of taking money from public services. We hear that 64% of the Government grant has been taken away in Liverpool. That is not just a number on a balance sheet. It was money for essential services that existed to support a community that needed support to grow, develop and prosper. But that rug has been completely pulled from under the people of Liverpool.

We heard from my hon. Friend the Member for Reading East that local councils have very little clarity about what is heading towards them beyond 2020. It is true that many came forward as part of the multi-year settlement, but it is also true that the fair funding settlement is sending shivers down the spine of many local councils because they know exactly what it means. We saw it with the deletion of the area-based grant in 2010, when money directed at areas of high deprivation was completely taken away. Over recent years, the introduction of the transition grant and the rural services delivery grant have targeted mainly Tory shires. We know what fair funding really means to the Government.

[Maria Caulfield]

I have to disagree. As I said in my speech, rural areas have had 45% less funding per head of population for decades. The rural services delivery grant goes some way, although not all the way, to redressing that balance.

[Jim McMahon]

Well, actually, it does not. I will give the hon. Lady an example. If a county area that had a strong council tax base was given £1 in central Government funding and 90p of that £1 was taken away, the area was treated favourably in the transition grant and the rural services delivery grant. If a metropolitan area had £100 and £50 was taken away, far more money that was delivering public services in that area has been taken away—£50 versus the 90p taken from the rural area—because the starting point is very different.

We cannot compare an area with a strong council tax base of high-value properties due to the way in which that area has developed historically—nothing to do with the local authority—with a post-industrial town where the council tax base is predicated on low house values. In my area, 87% of properties are in band A and band B, so there is a very low starting point. That is why far more is needed in council tax from those areas to generate the same amount of money.

[Maria Caulfield]

The hon. Gentleman is being extremely generous in giving way. Perhaps he should come to see the areas of deprivation in Newhaven in my constituency. There are no high-cost properties there. Perhaps he needs to look at rural areas in the round.

[Jim McMahon]

This ought not to be a fight between areas of high deprivation in our urban core and recognising that some services cost more to deliver in rural areas. Labour is calling for a genuinely fair funding settlement that would take into account deprivation, differential service delivery costs and the very particular circumstances of our coastal communities, which feel very much left behind. But we have no faith at all that that is where the Government are going. The Government are trying to redistribute a diminishing resource; we are seeing the redistribution of poverty under this Tory Government. The money just does not exist to fund public services where the demand is growing, which is in adult social care and children’s safeguarding.

We heard earlier that Basingstoke and Deane is a paradise of local government where residents have seen no impact of cuts whatever. That is unless, of course, they remember the 46% reduction of net expenditure on pest control, the 45% reduction on environmental protection, the 33% reduction on food safety, the 66% reduction on recreation and sport, the 27% reduction on open spaces or the 17% reduction on street cleaning.

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[Rishi Sunak]

What the Government are already doing about exactly that is working with the Department for Education on the most thorough and extensive piece of work ever undertaken to understand precisely the drivers of the need for children’s services, which of course includes deprivation. The report will conclude later this year or early next year, and I am sure the hon. Gentleman is looking forward to reading the results.

Beyond that, the troubled families programme is driving innovation on the ground, changing the way that local authorities work and bringing previously disparate providers of care together to help those who need it most. Other people may like to talk of compassion, but we in the Government are delivering it.

We have heard a lot about spending, but curiously rather less from the Labour party about who is paying for it all. We in the Government know who ends up footing the bill—ordinary hard-working tax payers. Over the past few months, the Labour party’s plans have become abundantly clear. We have heard about a radical change to council tax, a new local income tax, the abolition of the referendum tax limit and, as if that was not enough, a garden tax. Under the previous Labour Government, council tax doubled, and we all know that history tends to repeat itself. I can tell the House that this Government will always be on the side of hard-working tax payers. My hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) was absolutely right to say that we should be getting them value for money and keeping their bills low.

[Maria Caulfield]

Will my hon. Friend confirm that, under the Labour party’s garden tax plan, 10 million families would have to find £4,000 a year more?