Oral Answers to Questions

Robert Neill Excerpts

Thursday 25th November 2010 Commons Chamber

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

1. What estimate he has made of the likely amount local authorities will incur in redundancy costs in the next 18 months.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

It is for individual councils locally to determine redundancy policies based on their own circumstances. Decisions about when and how to make and manage work force reductions, including policies on redundancy payments, are rightly for individual councils to make as the employers.

[Mr Blunkett]

Ministers do not have the first idea what the cost will be to local taxpayers. Is this not a triple whammy, whereby families and individuals lose their services, communities find that provision is taken from them and individuals lose their jobs? Is it not correct that instead of paying for services, council tax payers will have to pay for redundancies for services that are being withdrawn? Is it not a scandal that the Government do not know what the impact will be?

[Robert Neill]

The Government have endeavoured to assist the most vulnerable local councils by increasing the amount of money available in the formula grant that is not ring-fenced, moving more money into formula grant, reducing the amount of ring-fencing and rolling more grants into one. I imagine that when his Government were in office, the right hon. Gentleman would have complained greatly about their removal of working neighbourhoods funding for his city of Sheffield, which will cost the city some £38 million. We will endeavour to find the means to cushion that—

[Mr Speaker]

Order. We are talking about redundancy costs, so we must get on with it.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I gather that in the comprehensive spending review the Government allocated £200 million for the capitalisation cost of redundancy payments. I also gather that local authority chief executives and treasurers suggest that the costs might be between £1.5 billion and £3 billion. If they are correct and the Government estimate is much lower than the actual sums involved, what are the Government going to do about it?

[Robert Neill]

Capitalisation, which enables local authorities to treat revenue expenditure as capital and borrow for it is an exception to the accounting rules, so there has always been a need for some control, and capitalisation for a number of streams has never run at 100%. It is also worth bearing in mind that local authorities have been aware for some time that reductions in expenditure were inevitable—they were planned by the previous Government. A shrewd authority will therefore have planned to deal with the problem in advance.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Local government now predicts an 11% cut in council budgets next year, with 140,000 jobs lost and a redundancy bill in excess of £2 billion—not the £200 million originally predicted by Ministers. Is local government right? Do Ministers know, or is the truth that they simply do not care about the public servants they will lay off or the public services that they will lay to waste?

[Robert Neill]

The greatest threat to public services for the future is failure to tackle the unprecedented deficit that the previous Government left us. We are prepared to work with local government to deal with those issues, but the hon. Gentleman and his party clearly have no answers whatever.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

2. What steps he is taking to reduce the number of unauthorised encampments.

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[Miss Anne McIntosh (Thirsk and Malton) (Con)]

T3. Mindful of the recent floods in Cornwall and the fact that from April next year, upper-tier and unitary authorities will have responsibility for flood risk management strategies, will the Secretary of State confirm that money for that purpose will be guaranteed in the comprehensive spending review? Will he please apply planning policy guidance note 23 to inappropriate developments on floodplains?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

Our colleagues in the Department for Environment, Food and Rural Affairs remain committed to funding fully local authorities’ new burdens under the Flood and Water Management Act 2010. Up to £36 million a year in total will be provided directly to lead local flood authorities for all those new burdens, and in addition local authorities will spend money supported by formula grant from our Department. I will certainly consult my colleagues on the PPG to which my hon. Friend refers.

[Caroline Flint (Don Valley) (Lab)]

It is not really turning out to be a very good day for the Secretary of State, but you know what, it has not actually been a very good fortnight since he told council leaders on 6 November that talk of front-loaded cuts was “fiction”. Now it seems that reality is beginning to dawn on him. According to a report in the Local Government Chronicle, he has been attending emergency meetings with the Treasury to plead for more money to mitigate the effect of those cuts, which could mean some councils losing up to 20% of their funding by April 2011. Whether or not it is true that the Secretary of State has been lobbying the Treasury to come up with more cash, may I urge him to start listening to the concerns of local government and ensure that councils get a fair deal that stops the damage caused by the heaviest cuts falling in the first year?

[George Eustice (Camborne and Redruth) (Con)]

T4. Analysis of the impact of reforming the formula grant on concessionary travel support suggests that most of the options currently being considered have urban-centric criteria and therefore could lead to more money going to urban areas and less to rural areas. What assurance can my hon. Friend the Minister give to places such as Cornwall, which rely on concessionary fare support, that they will not be disadvantaged by the changes?

[Robert Neill]

I understand very well the concern that my hon. Friend raises and the importance of the issue, particularly for shire districts. He is right that we have consulted on that, and we are considering the results of that consultation. I have to ask him to be patient, because we will announce our proposals for the local government finance settlement in the usual manner in due course.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

T2. What incentive does the Minister think cities such as Southampton will have, under the terms of the new homes bonus, to avoid losing millions of pounds of housing funding by having to build more homes each year than have been built in the city since the aftermath of the second world war, and on land that, because of the urban nature of such cities, does not actually exist?

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[John Mann (Bassetlaw) (Lab)]

T9. What support will the Secretary of State give the campaign that I am launching to ensure the retention in Retford of the full-time fire station and service, which has been there ever since the inception of local government?

[Robert Neill]

It is for individual fire authorities to decide the manning levels and the nature of the duty systems at fire stations, consistent with their obligations under fire services legislation and their integrated risk management programmes. It is not for the Government to interfere, because those authorities are best placed to assess the needs, priorities and risks in their areas.

[Mr David Ward (Bradford East) (LD)]

Will the Minister confirm whether the requirement on local authorities to front-load the budget reductions is in any way connected to the protection of the Olympics budget?

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[George Hollingbery (Meon Valley) (Con)]

Will the Minister give a brief account of progress on the FiReControl contract?

[Robert Neill]

The Government inherited the FiReControl contract from the previous Government. As I have indicated to the House already, we have concerns about the contractor’s persistent delays in delivery. In consequence, on 8 November, we placed the contractor in material breach, which requires a response within 20 working days.

[Heidi Alexander (Lewisham East) (Lab)]

In October, the Secretary of State told the House that it was outrageous for me to suggest that the money announced in the comprehensive spending review for elderly care would be wiped out by overall cuts to local government. Will he tell me what he disagrees with in the London Councils’ estimate that overall funding, in relation to the personal social services budget, will decrease by £885 million, or including inflation, £1.8 billion?

[Duncan Hames (Chippenham) (LD)]

Further to my questions in the House, the Secretary of State has challenged local government to get its house in order on executive pay-offs. Will he therefore commend the approach taken by Bristol city council, which has applied a cap of £700 per week in redundancy payments for each week’s pay in the settlement? That has cut redundancy costs by 30%, and it affects only the highest paid 10% of the work force.

[Robert Neill]

It is absolutely right that Bristol council has used existing flexibilities to reflect the circumstances that apply to it. That is the right approach, and why, as I indicated in relation to a previous question, it would be inappropriate for the Government to restrict the ability of local authorities to respond to their own circumstances in such matters.