Local Government Funding

Monday 6th December 2010 Commons Chamber

15:42

[Caroline Flint (Don Valley) (Lab)]

I beg to move,

That this House notes with concern that local councils will lose, on average, 27 per cent. of their funding over the next four years, compared to 11 per cent., on average, for Whitehall departments; regrets the frontloading of reductions in funding which means that the heaviest cuts will fall in the first year; believes that the unexpected severity of the cuts will result in substantial job losses in the public and private sector, undermine the voluntary sector and hit frontline services; regrets the inadequate level of capitalisation available to local councils to deal with redundancy costs of up to £2 billion; further notes the commitment in the coalition agreement to ensure that fairness is at the heart of decisions and that those most in need are protected; is disappointed that the most deprived areas will be hit hardest by the reductions in funding; and calls on the Government to revise its proposals before making the provisional finance settlement to ensure that any reductions in funding are more evenly spread over four years and do not fall disproportionately on the most deprived communities.

There is common cause across the House in recognising the need to reduce the deficit. Labour had a plan to halve Britain’s borrowing over a four-year period. That would have meant cuts in spending and would have resulted in reductions to local government funding, but not like the Government’s cuts. I will not let the coalition pass the blame for cuts of their choosing, their design and their timing on to us. Let me, once and for all, nail the myth that there is no alternative. The Government had a choice.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

That would be a reasonable position for the right hon. Lady to adopt if she set out in some detail how Labour’s programme of cuts would impact on local government.

[Caroline Flint]

We are dealing with a package, which is what local councils will face. Even on the coalition Government’s most extravagant predictions of what we might have cut, with which I do not concur, the cuts proposed by the coalition Government, of whom the right hon. Gentleman is an ally, would have meant another £2.2 billion worth of cuts over a four-year period, and they are front-loaded in a way that is dangerous for local communities and the services that they need.

[Mr Dave Watts (St Helens North) (Lab)]

Is my right hon. Friend amazed to hear that question, bearing in mind that the Government have not announced what cuts are to take place? It is likely that local authorities will not know that until December, giving them just a few months to adjust the budget.

[Caroline Flint]

My hon. Friend is right: we do not know what the settlement announcement will be at this stage, but what we do know is that local authorities have been told that they will face cuts of 27% in their funding over a four-year period. As I will set out in more detail, much of that is being front-loaded in an incredibly short period of time, which makes no sense at all.

[Mr Jim Cunningham (Coventry South) (Lab)]

Does my right hon. Friend realise that Coventry city council, for example, will lose not only front-line staff, but £45 million over the next two or three years in different types of grants? Is that not an horrendous thing to inflict on the people of Coventry?

[Caroline Flint]

It is absolutely dreadful. As we will see in this debate, not only are the cuts unfair for the whole of local government; they will attack the poorest communities up and down the country. That is neither fair nor right, and it is not something that we would have done. This Government had a choice. They have chosen to cut deeper and faster, taking a huge gamble with jobs and growth. They could have shared the reductions in spending between Whitehall and town halls, but instead, they have chosen to dump cuts on local councils up and down the country. The Government could have spread the cuts evenly over four years, giving councils time to plan where savings could be made, but instead they chose to front-load them, so that councils are crippled by the heaviest cuts falling in the first year.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Does the shadow Secretary of State agree that a freeze in council tax will help hard-pressed families, who were hit by the previous Government’s year-on-year increases in council tax bills?

[Caroline Flint]

The irony of the hon. Gentleman’s point of view is that the most affluent areas will benefit from the freeze in council tax and the transition payments that the Government are providing. Those in the poorest areas, with the lowest amount of take from council tax, will have a double whammy, because to pay for the council tax freeze, the 2.5% is being top-sliced from the formula grant. The Government could have ensured that the cuts were spread fairly, but their choice was not to do so. Those are the risks that they are prepared to take. The danger is that communities up and down the country will pay the price, and we will not let the Government forget it.

[Hazel Blears (Salford and Eccles) (Lab)]

Is my right hon. Friend aware that the chairman of the Tory party, Baroness Warsi, said to the Manchester Evening News in September:

“Regions like Greater Manchester will not suffer disadvantage under the coalition government…If anything the regions will be protected and supported to ensure they grow”?

With Salford council facing £40 million to £45 million of devastating cuts and West Oxfordshire district council—which contains Witney, the Prime Minister’s constituency —getting a 37% increase, how can this possibly mean that regions such as Greater Manchester are to be protected?

[Caroline Flint]

As usual, my right hon. Friend makes an excellent point, based on facts, and the facts are that the cuts to local government will have a devastating impact on our poorest communities. Not only that, but local authorities up and down the country, of whatever political persuasion, are facing a huge task in having to tackle the front-loading of cuts in a matter of weeks, which is not good for either services, jobs or communities.

The Government like to talk about localism—about devolving power to local councils and empowering local communities. In fact, the coalition agreement boldly states that the Government will

“promote the radical devolution of power and greater financial autonomy to local government and community groups.”

Well, the cuts have come, but we are still waiting for the localism. For all their talk of localism, this Government have imposed the largest cuts to local government funding for a generation—cuts that are much deeper than those to other Departments or those originally forecast in the Budget in June; cuts that fall heaviest in the first year and hit the most deprived communities. So much for fairness, localism, and devolving powers to local councils and community groups. The only thing that this Government want to devolve is the blame for difficult decisions.

[Joan Ruddock (Lewisham, Deptford) (Lab)]

I wonder whether my right hon. Friend recalls the Chancellor saying:

“I am not going to balance the budget on the backs of the poor.”

Does she agree that what we are seeing is breathtaking hypocrisy?

[Caroline Flint]

I do, and whether in local government, education or health, it is the poorest and vulnerable who are being hit the hardest, as well as those hard-working families who pay their way, but who also depend on local services to provide for themselves and their families. They do not ask for much from the Government, but they ask for them to be on their side—to make sure that work pays and that they can look after their families—and this Government are not providing that security. The whole House knows why that has happened—why local councils will lose almost one third of their funding over the next four years.

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

A debate about local government is welcome, because local government and its financing are important, but as the right hon. Lady launches her attack on the Government, as she is entitled to do, will she make her position clear,? Did not her Government, when in office, say that there would be a £52 billion cut in public services? How much of that would have fallen on local government? Was the decision to end the working neighbourhoods fund and to cut regeneration funding not taken in March by her Government’s Chancellor of the Exchequer, when he was in office?

[Caroline Flint]

On the working neighbourhoods fund, I am afraid that the hon. Gentleman has fallen into his Tory coalition partners’ trap. The Tories say, and he repeats the claim, that we planned to scrap the working neighbourhoods fund and had already cut money from it. In the March Budget we did announce savings, including £300 million through rationalising the regional development agencies, but we clearly distinguished between those programmes that were not a priority and would therefore be scrapped and those, including the working neighbourhoods fund, to which we were committed but would look to find savings in. It was a three-year programme in which, in November 2009—[Hon. Members: “Three years.”]. Three years’ funding is more than the one year that we used to have under Tory Governments, and more than the non-existent funding that poorer communities had under the Tory Government from 1979 to 1997.

Indeed, in November 2009 we announced a £40 million boost to the fund, worth £1.5 billion from 2008-09 to 2009-10. Of course, we had to look at programmes, but there is no evidence whatever to suggest that we would have scrapped the working neighbourhoods fund. That is not the case.

[Robert Halfon (Harlow) (Con)]

The right hon. Lady talks about devolution, but her Government took £13 million out of the housing budget in Harlow, where 45% of housing is social housing. The current Government are ending that and guaranteeing Harlow housing money for Harlow people.

[Caroline Flint]

I am afraid that is rubbish. The Labour Government, in so many different ways, contributed not only to boosting the refurbishment of homes that had been left to languish for too many years under the Tory Government, but to ensuring that there were ways and means for local councils, with other housing providers, to provide more homes.

The National Housing Federation, I think I am correct in repeating, says that, once the homes that Labour funded in its last period in office have been built, under the coalition Government’s plans, no more homes will be built. In relation—[Interruption.] The Minister for Housing and Local Government says “nonsense”, but let us just wait and see, because even in a time of recession, it was Labour money that worked in partnership with others—[Hon. Members: “Taxpayers’ money”.] It was taxpayers’ money with which a Labour Government decided that we should promote the building of more social homes. Even in the teeth of recession, I think we built at least 55,000 homes to provide for people who could not afford a house on the private market.

We all know why that front-loaded package is happening: because the Secretary of State gives the impression of being more interested in trashing local councils, chasing cheap headlines, calling councillors stupid or lazy and telling local authorities to grow up. The hundreds of thousands of decent, honest, hard-working people who work in local government, and the millions of people who depend on the services and support that they provide, hardly seem to warrant a second thought, but they will be the ones who pay the price for this Government’s decisions.

To make matters worse, local councils are being forced to make deeper cuts than they expected and to do so much quicker, because the reductions in local government funding are front-loaded. As much as 50% of the cuts could fall in the first year. Councillors are looking at cuts of 14%, 16% or 18% to their budgets within weeks, but the Secretary of State still denies it. He says that it is a fiction, but he is about the only person left who still thinks so.

[Sir Paul Beresford (Mole Valley) (Con)]

I hope that the right hon. Lady will not forget that from 1997 onwards the then Deputy Prime Minister, the Secretary of State responsible for local government funding, changed the formulas three times, each occasion moving money north to Labour authorities and away from London and the south-east. In one year, the year-on-year effect in Surrey, for example, was a £39 million loss.

[Caroline Flint]

I think I am right in saying that, for every year we were in power, there was an above inflation increase in local government spending. I am not going to apologise for trying to show leadership in addressing need, inequality and poverty in this country. Perhaps that is something that the Secretary of State and his hon. Friends on the Government Front Bench do not want to champion anymore.

[Lyn Brown (West Ham) (Lab)]

My right hon. Friend talked about the cuts being front-loaded. Figures from Newham council suggest that a large proportion of the nearly £40 million cuts for Newham—13% of the 25% total cuts that are being proposed by the Government—will take place in year one.

[Caroline Flint]

That is another example of the devastating impact of the cuts in the first year. I say to the Secretary of State: is that a fiction?

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

Yes.

[Caroline Flint]

I am very much looking forward to the missives I can hear being typed out in town halls in London and across the country to put the Secretary of State right on that one.

[Mr Watts]

Is my right hon. Friend aware that the changes to the grant system are only putting right what the previous Tory Government had done? When I was the leader of St Helens council, the then Tory Government, in one year, took more than £13 million of grants from St Helens—a deprived community—to give to their friends.

[Caroline Flint]

As he did during a Westminster Hall debate last week, my hon. Friend lays out the real choices that are being made here about fairness and unfairness. What is happening is unfair and is not right.

[Stephen Lloyd (Eastbourne) (LD)]

Talking of hypocrisy, does the right hon. Lady agree with her party’s leader, the right hon. Member for Doncaster Central, who said on the “Today” programme in April, “as we look forward” regeneration spending is

“not the biggest priority we face”

as there are “other competing priorities.”? Is that not hypocrisy writ large?

[Caroline Flint]

The constituency of the leader of the Labour party is actually Doncaster North not Doncaster Central.

As I opened the debate, I did not hesitate for a moment to say that reductions and cuts would have had to be made. The question is how much, how deep and how fast. It is not just Labour politicians who are saying that; the chair of the Local Government Association, Baroness Eaton, a Conservative peer said:

“The unexpected severity of the cuts that will have to be made next year will put many councils in an unprecedented and difficult position.”

I could not have put it better myself.

[Henry Smith (Crawley) (Con)]

Will the right hon. Lady give way.

[Caroline Flint]

I will give way shortly.

Grahame Lucas, the President of the Society of District Council Treasurers, said that front-loading was happening —not that it was fiction, Mr Secretary of State—and that its consequences would be disastrous. Even the Secretary of State’s Parliamentary Private Secretary, the hon. Member for Wimbledon (Stephen Hammond) knows that there is a problem. At County Councils Network conference on 22 November, he told council leaders that front-loading

“has exercised ministers for some time”.

He asked them to “wait for the settlement.” Who knows, perhaps today’s debate and the cries from their own people across the country will have an impact. Today, we are trying to tell the Government that they should listen and try to do something to avert the disaster that will happen in a few weeks’ time.

[Andrew Percy (Brigg and Goole) (Con)]

I thank my constituency neighbour for giving way to me. May I say gently and in the most friendly way possible, that I served on a metropolitan northern authority for 10 years and the picture was not quite as rosy? Although there might well have been some extra resources, all too often, what came with that were huge burdens that were not fully funded—whether that was free swimming, local bus passes or whatever. Local tax payers, who are some of the poorest tax payers, had to pick up the bill.

[Caroline Flint]

The hon. Gentleman is indeed a neighbour of mine in Yorkshire. Correct me if I am wrong, but I cannot remember that there were many Tory-controlled councils that did not want free swimming when it was being offered or that did not want a number of other benefits for their communities. However, I would have to say to the hon. Gentleman, in the nicest possible way, that if people thought it was not rosy then, they must now be in despair about what is ahead.

We are hearing from councillors of all parties that if councils are not given enough time to plan which cuts to make, they will be forced into making rushed decisions with no time to plan for the consequences, which could end up costing more than they save.

[Christopher Pincher (Tamworth) (Con)]

rose—

[Mr Jim Cunningham]

rose—

[Caroline Flint]

I will give way shortly to hon. Friends and to Government Members. I want to be generous because this is such an important issue.

The Secretary of State—I agree with him on this—wants councils to think how they might transfer assets to the community, which we enabled when we were in government, and involve voluntary groups and share back-room functions, which we also encouraged when we were in government. There is absolutely nothing wrong with the principle, but it cannot be done in a few rushed months: it takes time and planning, which the Government refuse to give to local authorities. As a result, the worry is that councils will simply go for the easiest and quickest cuts instead of thinking about how they save money while minimising service cuts and job losses.

[Henry Smith]

The right hon. Lady said that we are apparently yet to see any localism or devolution to local government, but does she concede that greater flexibilities and the ending of the ring-fencing of many budgets will give exactly the flexibilities that many local communities need? It will certainly be welcomed by my local authority, West Sussex county council, which suffered eight years of the lowest possible Government settlements under the previous Government.

[Caroline Flint]

I recognise the hon. Gentleman’s experience in local government; I believe he was leader of West Sussex county council.

The Secretary of State says that local councils have a choice:

“They can panic; they can slash and burn services regardless of the impact that will have. Or they can take the opportunity to completely rethink everything they are doing, creating a modern, flexible and innovative council.”

Councils should be modern and should embrace flexibility and innovation, but by imposing such huge, unprecedented front-loaded cuts on them he denies them that very choice. How can councils completely rethink everything in a matter of a few weeks?

[Mr Cunningham]

Does my right hon. Friend think that we have here a re-run of the ’80s, when the Conservatives cut the rate support grant and the housing allocation, local authorities were forced to sell old people’s homes and there were reductions among teachers and front-line staff. The House should not be filled up with that lot over there—they are using the recession as an excuse to inflict Thatcherite policies. Last week the Prime Minister admitted to being a child of Thatcher. Does not this House recognise what is going on right under its nose?

[Caroline Flint]

It is actually worse than the ’80s, because these cuts are deeper and faster, and they leave local government with very little choice. There are positive aspects to devolving power; we did a lot of it while we were in power. [Interruption.] It is true. I know that the Secretary of State likes to issue his diktats from the Department like some Joe Stalin, but rewriting history is a stretch too far.

[Hazel Blears]

My right hon. Friend is making a characteristically powerful case against the front-loading of these cuts. I ask her, as I hope to ask the Secretary of State, to consider whether, as there is apparently likely to be a £3 billion surplus in national non-domestic rates, it would be a good idea to distribute that sum to smooth out the effects of the cuts next year and the following year. Would that not seem to be an eminently sensible course of action that may well commend itself across the House?

[Caroline Flint]

I understand that the Secretary of State has had a letter from John Merry on this important issue. What we are asking is pretty reasonable. We are saying: “Have another look. See whether you can stagger these cuts in a better way. See if you can dampen the cuts to tackle inequality, but also look at other opportunities that are available to get this right by minimising the impact on front-line services and the unnecessary loss of jobs.” That is what we are talking about: the people who will pay the price in their jobs.

[Mr Gordon Marsden (Blackpool South) (Lab)]

My right hon. Friend rightly talks of what we did in government. Does she share my amazement and that of many hon. Members at the joviality of Government Members? In their first few months in office, the Government ignored the impetus that had been created by the Labour Government with Total Place? The Government had to be dragged, screaming, by their advisers to reconsider, and even then they renamed it.

[Caroline Flint]

There is a rewriting of history with regard to these good ideas. When I picked up one of the Sunday newspapers to read about changes to planning, I recognised a few changes that had been initiated when I was Minister for Housing and Planning and had been carried on by my right hon. Friend the Member for Wentworth and Dearne (John Healey). Total Place was a very good idea. It was a system by which different organisations came together in common cause to tackle challenges in the community, and to share their funding and budgets. The scheme has had two names since the coalition Government came to power: place-based budgets and community-based budgets. The fact is, it was our idea. I am sure that my hon. Friend the Member for Blackpool South (Mr Marsden) will agree that such innovation is all very well, but that it is difficult to imagine the Total Place concept hitting the ground running in the context of the cuts faced not only in local government but in policing and through the reorganisation of primary care trusts.

[Mr Rob Wilson (Reading East) (Con)]

The right hon. Lady is being most generous in giving way. May I clarify her position on cuts? She seems to be saying that her party would cut more slowly than the Government. Does she understand the implications of that? It would mean the Government borrowing more and paying more interest, because they would be borrowing over a longer period. Does she really think that taxpayers would thank a Labour Government for paying back money on their behalf to foreign Governments such as the Chinese Government?

[Caroline Flint]

The price being paid in this country is that of people being put on the dole and therefore not paying tax. The price will be paid by local economies and private businesses that depend on local government contracts and by the voluntary sector, which depends on local government to fund its services. There are prices to be paid and choices to be made. We would not have chosen to front-load the cuts in such a way as to fundamentally break the fabric of our communities.

Organisations that research this issue have shown that parts of the country, through no fault of their own, depend on public sector jobs to keep their communities afloat. Despite all the warm words in Government statements, the coalition agreement and the comprehensive spending review document about fairness and protecting the most vulnerable communities, there has been little sign in the statements of the Secretary of State, the Chancellor and the Prime Minister of how they will ensure that the cuts do not disproportionately affect our poorest communities. I hope we will hear something in the financial settlement. That is why we are having this debate today. At the moment, I am afraid that Government Front Benchers are not listening.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Does my right hon. Friend appreciate the alarm that the people of Barrow and Furness are experiencing? According to modelling in yesterday’s Local Government Chronicle, their community could be among the top three places in the country to experience the deepest cuts, despite its having many of the most deprived areas.

[Caroline Flint]

My hon. Friend’s point about his constituency applies to others. It is clear that some of the most deprived communities in our country face the biggest impact and the brunt of the cuts, not those who are better off. I wish that every area was better off, but it is not like that. That is why we must tackle inequality and be fair. We must be a civilised and decent society, but that is not what is going on.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Does my right hon. Friend share my concern that it is not only deprived communities that will suffer because of the way in which the cuts are being implemented, but women—and thereby children—because they make up approximately 73% of local authority employees?

[Caroline Flint]

My hon. Friend hits the nail on the head. About 74% of those who work in local government are women. It is rather ironic that on the day the Fawcett Society is again challenging the coalition Government’s Budget in court because of its disproportionate effect on women and children, women are yet again being asked to pay the price. Women who work in local government, often part-time at the lower end of the pay scale, face the complete disruption of their family and working life.

[Several hon. Members]

rose—

[Caroline Flint]

I have been very generous in taking interventions, and I am conscious of the number of Members who wish to speak in the debate. [Interruption.] I do not think that hon. Members can accuse me of not being generous in giving way. I will take more interventions later, but I should like to make a bit of progress.

[Christopher Pincher]

Will the right hon. Lady give way?

[Caroline Flint]

The hon. Gentleman heard what I had to say—I am going to make a bit of progress, but I may take more interventions later.

People will pay the price with their jobs. The Secretary of State likes to give the impression that savings can be made without causing job losses, as though simply by freezing recruitment, natural wastage, redeploying people and scrapping or sharing back-room functions, local councils will find the savings they need to make without hitting front-line services. Local councils cannot deliver such savings so quickly on top of the £1 billion of savings they have already made this year without cutting jobs or reducing services. Paul Carter, the Tory Kent council leader, said:

“There is only one way of bringing budgets into line. One is to employ less people and the other is to do fewer things.”

In fact that is two, but I take his point. Up and down the country, local authorities are already cutting vital front-line services and shedding staff.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the right hon. Lady give way?

[Caroline Flint]

No, I will not give way.

Councils are cutting not just staff in back-room functions but teaching assistants, social workers and street cleaners—hundreds of thousands of people delivering essential front-line services. There will be 140,000 of them this year alone, according to the Local Government Association, which has upped its prediction from 100,000. In Birmingham, 26,000 staff have been warned that they could lose their jobs, and in Bradford the figure is 10,000. They, along with the people who depend on the services they provide, will pay the price for the coalition Government’s choices.

It is no good the Government trying to use last week’s Office for Budget Responsibility forecast to obscure the heavy job losses that will be inflicted on local government. The OBR forecast shows that Whitehall Departments will lose fewer staff than had been feared, because the cuts were slightly less than had been predicted in the Budget. However, the cuts to local government are deeper and faster than had been expected, and, as a result, the LGA says that more workers, not fewer, will lose their jobs this year—40,000 more of them, all because the Government chose to impose such heavy front-loaded cuts on local councils.

[Christopher Pincher]

Will the right hon. Lady give way?

[Caroline Flint]

No, I will not.

It is unclear how local councils will meet the costs of laying off so many staff. The LGA believes that redundancy costs alone could be as high as £2 billion, but the Government’s capitalisation arrangements, which were set up to help councils with the cost of cutting jobs, come to only £200 million. That could be as little as one tenth of what is needed. If councils are not given more support and more flexibility to cover the costs of redundancy payments, it will simply mean more cuts elsewhere and ever deeper cuts to vital front-line services.

Local councils cannot deliver the savings they need simply by trimming a few salaries at the top, scrapping council newspapers or encouraging councils to dip into their reserves. Local councils have a duty to find the best deal for council tax payers, which includes ensuring that councils’ executives are not paid over the odds. Labour introduced more transparency in chief executive pay, and restraint is vital, particularly in the current economic climate. It is absolutely fanciful, however, to suggest that reducing a handful of executive salaries across the country will solve the problem of huge front-loaded cuts, and the Secretary of State knows it.

[Harriett Baldwin (West Worcestershire) (Con)]

Will the right hon. Lady give way?

[Caroline Flint]

In a moment.

Nor is encouraging councils to dip into their reserves any sort of solution. As the Secretary of State well knows, most of the money is already earmarked for specific purposes. I had a look at the reserves in Ministers’ areas compared with those of our shadow team and found that their areas have £100 million more reserves in their bank accounts than ours. Burnley, one of the areas likely to be hit hardest by cuts in funding, could lose anything between 25% and 29% of its funding over the next four years, and it has just £1.1 million in unallocated reserves. Unless the Secretary of State wants to nationalise council reserves and redistribute them to the councils hardest hit by the cuts, this is just another red herring.

[Stephen Mosley (City of Chester) (Con)]

Will the right hon. Lady give way?

[Caroline Flint]

I will give way shortly—and I will give way to the hon. Member for West Worcestershire (Harriett Baldwin) shortly too, because she caught my eye as well.

Let us be in no doubt that cuts of this magnitude and imposed this quickly will hit front-line services. Roads damaged last winter will go unrepaired this year, too; potholes will go unfixed, pavements will go unswept, street lights will be turned off, youth clubs will close, libraries will shut and, at a time when more people than ever need help with social care, fewer will find their local council able to help.

[Harriett Baldwin]

The right hon. Lady mentioned a handful of council chief executives who make significant salaries. In fact, a total of 129 make more money than the Prime Minister.

[Caroline Flint]

What I said is on the record. I am not going to defend some of the pay in local government, but the Secretary of State has appointed a new permanent secretary on, I think, £170,000 a year. He had the chance to ensure that he earned less than the Prime Minister, but he refused to do so. To claim that chief executives’ pay equates to the level of cuts that local government is facing is to live in fantasy land—it is ridiculous.

The poorest communities will be the hardest hit. The Government have made much of their commitment to fairness. The coalition agreement reads:

“Difficult decisions will have to be taken in the months and years ahead, but we will ensure that fairness is at the heart of those decisions so that all those most in need are protected.”

Those are fine words, but the Secretary of State’s own figures show that the councils worst hit over the four-year settlement include Hastings, Burnley, Blackburn with Darwen, Hull, Barrow-in-Furness and Hartlepool—all in the 10% most deprived councils in the country—along with Liverpool city council, which is the most deprived local authority in England.

[Julie Hilling (Bolton West) (Lab)]

Does my right hon. Friend agree that it is unbelievable and wrong that children and young people in particular are facing enormous cuts? Youth services throughout the country are being destroyed, and youth workers throughout the country are getting their redundancy notices. Young people are only young once and need support and services now—it is no good their having them in the future—and they should not be paying a disproportionate cost in the cuts.

[Caroline Flint]

I am afraid that the coalition Government clearly do not care. On top of what they are doing to local government, they are scrapping the education maintenance allowance, which is the best chance to get young people to stay on in education or training at 16 and possibly go on to university or other further education courses. They have scrapped the future jobs fund and the working neighbourhoods fund, much of which was directed at ensuring that young people did not leave school and enter a period of inactivity, whether out of work or training and education. They simply do not care.

[Stephen Mosley]

From what the right hon. Lady said, it seems that the more prudent councils have been preparing for this day for a couple of years, but many councils across the country have not been so prudent. Should she not aim her anger at councils that have been wasting money, increasing council tax and providing poor services over the past few years, rather than at Government Front Benchers, who are trying to do something about it?

[Caroline Flint]

Here we go again—let us bash local government and local councillors up and down the country trying to do their best, and let us tell them it is their fault. I do not think there is a local authority in the country that was preparing for this level of cuts. The suggestion is quite ridiculous.

[Gordon Birtwistle (Burnley) (LD)]

As the MP for Burnley, which has been mentioned on numerous occasions, I would like to advise Members that the Liberal Democrat-controlled council is doing its best under the circumstances. Does the right hon. Lady remember that in the last three years of the Labour Government Burnley received a 0.5% increase in grant from national Government? The Labour Government nailed councils to the wall in their last three years by not financing them properly. It is strange that she is having a go at the coalition Government given that Labour bankrupted the country in the first place.

[Caroline Flint]

I would rather defend an increase, no matter how small, than defend the indefensible, as is happening here today.

Let us look at the disparities. As I have said, a number of councils, including Burnley, are facing the most devastating cuts. At the same time, a handful of district councils in the south-east, including South Cambridgeshire and West Oxfordshire—two of the least deprived areas in the country—could see not a reduction but an increase of up to 30% in their funding, as a consequence of funding that was previously ring-fenced for deprived authorities being rolled into the overall grant.

[Graham Jones (Hyndburn) (Lab)]

I am delighted that my right hon. Friend has managed to give way. She mentioned Burnley, the neighbouring constituency to my own. Housing market renewal worth £9 million to Burnley and £8 million to Hyndburn has just been cut, and the working neighbourhoods fund, which is worth £2 million, has also been slashed. Burnley borough council has been funded in the past two or three years by enormous sums from the Government, as has Hyndburn, and I do not accept the point made by my colleague, the hon. Member for Burnley (Gordon Birtwistle).

[Caroline Flint]

It is always helpful to have a wider debate, and I thank my hon. Friend for that contribution.

[Mr Rob Wilson]

Will the right hon. Lady give way?

[Caroline Flint]

I have already given way to the hon. Gentleman, and I will not do so again.

How is it fair that the communities most reliant on public sector employment will lose the greatest number of jobs? How is it fair that the areas most in need will find their services most cut? How is it fair that the communities least able to shoulder the brunt of cuts to local councils will bear the heaviest burden? Yet that is exactly what will happen, as the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) let slip earlier in the year, when he said:

“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]

The same is true of the Government’s plans for a council tax freeze. It might sound fair, but it is not, because it gives the most to the wealthier councils with the biggest council tax yield—the councils with the broadest base of middle and high band properties—and the least to poorer councils with more modest properties. This involves money that has been top-sliced from local councils’ funding, resulting in a double whammy for our poorest areas.

It is not just people who work in local government who will lose out. Hundreds of thousands of people across the country who work in the private sector—plumbers, builders, electricians, IT companies and office suppliers—depend on local council contracts. Local councils spend nearly £35 billion every year procuring services and supplies from the private sector, with more than £20 billion going to small and medium-sized businesses. Some of those firms rely on public sector contracts for 50% or 60% of their business, and if local council contracts dry up, some of them will have to lose staff and might even go out of business altogether. PricewaterhouseCoopers forecasts that for every job lost in the public sector, another will be lost in the private sector, so cuts in local government funding will hit not just those who work in local government and those who rely on its services, but the wider local economy.

What of the Government’s suggestion that if local councils do less, voluntary groups will miraculously emerge and seamlessly fill the gap left by local authorities? The week before last, the Secretary of State warned the House that local councils would “rue the day” they cut funding to voluntary organisations, but what choice will they have? When nearly a third of voluntary organisations rely on funding from local authorities, and local authorities are losing nearly a third of their funding—much of it this year—voluntary groups will lose out. Local councils and voluntary groups are not adversaries—they work together and rely on each other. Voluntary groups reach parts of the community and fulfil certain roles that local councils sometimes cannot, and local councils have the resources and support at their disposal that voluntary groups do not always have. Without each other, they are both weakened.

[Christopher Pincher]

I am indebted to the right hon. Lady for giving way. It is nice to hear her support for the big society and voluntary groups, but she seems to have rather a selective memory. May I remind her of the BBC report published on 1 March this year, when her party was still in government? It stated that very significant cuts in local government would have to be made, whichever party was in power, to deal with the depth and scale of the recession that her Government had created. The right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) also said that there would have to be economies. With friends like those, does she need enemies?

[Caroline Flint]

rose—

[Mr Speaker]

Order. Before the right hon. Lady responds, I will make two points. First, interventions are becoming rather long and need to get shorter. Secondly, for the good conduct of the debate, I want to touch on an earlier intervention by the hon. Member for Eastbourne (Stephen Lloyd). I did not hear it clearly at the time, but reference was made to the alleged hypocrisy of another Member. Such references must not be made on the Floor of the House. Making a personal accusation of hypocrisy is disorderly. I recognise that the hon. Gentleman is a new Member, but I hope that what I have said will be helpful for the House as a whole.

[Caroline Flint]

Thank you, Mr Speaker. I will not hold the hon. Gentleman too harshly to account for what he said in the heat of the debate.

We must recognise that the deficit has to be reduced—and we do. [Interruption.] We have been very clear about that. There are choices to be made, however, about how far and how deep the cuts should be. What does the hon. Member for Tamworth (Christopher Pincher) have to say to Baroness Margaret Eaton, Tory leader of the Local Government Association, who only last week issued a press release on the “unprecedented” levels of the cuts and the impact of front-loading? It is not just Labour people talking about this—[Interruption.] I hear an hon. Gentleman shout “What would you do?” from a sedentary position. We would not front-load the cuts in this way for a start, and we would not have gone as deep.

[Mr Watts]

Is it not clear that people will judge the Government not on the cuts, but on how they are distributed. So far, what we know is that they will hit the most deprived. Is that not what it is all about?

[Caroline Flint]

I am afraid that there is another motivation, and it has absolutely nothing to do with the deficit. I think I am right in saying that the Office for Budget Responsibility report suggested that a surplus would start to appear in a few years’ time. Given how the coalition Government like to sing from the rafters about OBR reports, it is a shame that they do not think about areas where they could use that information to minimise the damage of the cuts that local authorities face and adopt a much more thoughtful approach to their impact on the ground.

There is no doubt about it—the impact on local communities up and down the country will be harsh and, I think, undeserved. Whatever plans local authorities might like to make—working with the voluntary sector and the private sector and looking at ways to share functions and of delivering services differently are all, I think, subjects worthy of debate—they can do only so much in the time available. That time is simply not enough.

[Several hon. Members]

rose—

[Caroline Flint]

I will give way to the hon. Member for North West Leicestershire (Andrew Bridgen), but after that I shall take no more interventions. Hansard will show that I have already taken more than my fair share.

[Andrew Bridgen]

I thank the right hon. Lady for giving way. My local council in North-West Leicestershire is already right-sizing its top management to protect essential front-line services. Is that not the way forward? She will be well aware that almost a third of Government spending is channelled through local government, so no credible deficit reduction plan can leave local government immune. Without a credible plan, and in the absence of her telling us what a Labour Government would cut instead of local government—perhaps defence, health or education—she has no credibility whatever in the debate.

[Caroline Flint]

I agree with the hon. Gentleman in so far as there has to be a sharing of the reductions across the different sectors of public spending, but I do not agree that the disproportionate expectations of local government are fair. I just do not think they are fair. In a less partisan arena, the hon. Gentleman might agree that even if we were to pursue the level of cuts proposed by the Government, it would be worth thinking about staggering them over the four-year period rather than expecting the largest amounts to be cut in the first year. Local authorities have been set an incredible challenge in that respect. In a more reasoned environment, most sensible people would recognise that fact and say, “Let’s do something about it before the financial settlement is announced and try to put right some of the wrongs created by the package following the comprehensive spending review.”

In so many ways, the motion says that the Government are not listening. Let me tell the House and the country that Labour is listening and that there is an alternative. The financial settlement is yet to be settled; there is time to put this right. Savings need to be found and, yes, cuts will need to be made in local government—but not like this: not in this way and not in this time scale.

Today, the Government have a choice. They can plough ahead with their plans and impose huge cuts on local councils, forcing them to find savings in the next few weeks—councils will have to decide their budgets by February 2011. They can impose cuts that will unnecessarily cost jobs, undermine the voluntary sector, hit front-line services and create huge uncertainty in the private sector. They can force through cuts that will hit the poorest communities the hardest, or they can choose to listen. They can listen to Members throughout the House—publicly or privately—who I know will take the opportunity here today, and in other forums, to speak about the damage that huge front-loaded cuts will cause. They can listen to the people who work in local government and provide the services on which we all rely, often with very little reward. They can listen to the voluntary sector, and to the small business community.

Will the Secretary of State ensure that any reductions in funding are more evenly spread over four years? Will he introduce more flexible capitalisation arrangements, so that local councils are not forced to make even deeper cuts in services and jobs to meet the cost of redundancy payments? Will he introduce damping measures to stop our poorest communities being hit hardest? Those are the three questions that the Secretary of State must answer today.

I commend the motion to the House.

16:31

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

I am most grateful to the right hon. Member for Don Valley (Caroline Flint). I could hear the gentle scribble of history being rewritten. I think that had Winston Smith been part of the process, he would have been down to his second stub of pencil by now. I would happily have walked into Room 101 just to hear the end of it.

We are really very pleased, in a way, that the motion has been tabled. We in the Department are very sensitive people, and we felt that we had done something wrong as far as the right hon. Lady was concerned. She doesn’t phone, she rarely writes, she asks few questions, and she seems to be unaware that we have laid statements. We thought somehow that she was not all that interested. So we are very pleased that she is now back in action, and is taking an interest in the Department. Admittedly it seemed a weird time for her to do so, given that the settlement is just a few days away, but then it occurred to me: she has a plan.

It is all about the business of the blank piece of paper. The right hon. Lady is actually going to write something down. She is going to give us some Labour policy. We are going to be told, in this debate—[Interruption.] I am optimistic. We are going to be told what percentage of cuts the right hon. Lady thinks reasonable. The Local Government Association has already given us a percentage. If the right hon. Lady—who spoke for hardly any time—wants to give us a percentage that she considers reasonable for the coming year, I will happily give way to her.

[Mr Watts]

Will the Secretary of State give way?

[Mr Pickles]

I will happily give way for a trip down memory lane. What does the hon. Gentleman want to tell us about the 1980s?

[Mr Watts]

It is the 1960s that I want to talk about. The Secretary of State is trying to take us back to them. Can he explain why he is front-loading the cuts? Everyone knows that he is doing it because a general election is coming. [Hon. Members: “What?”] Well, he knows when the election will come. Can he tell us why he is front-loading the cuts? It is a simple question.

[Mr Pickles]

The hon. Gentleman may be wondering why he is sitting on that side of the House. We have had a general election. His party lost and we won, which is why we are on this side of the House. As for the front-loading—[Interruption.]

[Mr Speaker]

Order. The Secretary of State is not a notably softly spoken man, but I am having considerable trouble hearing him. He says that he is a gentle and sensitive soul; that is as may be, but I can normally hear him. There is so much noise in the Chamber that I cannot hear him now, and I want him to be heard.

[Mr Pickles]

I am most grateful for your protection, Mr Speaker. As for the front-loading, the settlement has not been announced. Opposition Members are getting very excited about press reports, which is not a very sensible thing to do.

[Mr Rob Wilson]

I thank my right hon. Friend for giving way so early in what I am sure will be a brilliant speech. Does he agree that although we are very pleased to be having the debate today, it seems from the number of Labour Back Benchers who have turned up that they are not very pleased at all?

[Mr Pickles]

There is a point in that, but I have to say to my hon. Friend that we must give all the encouragement we can to the right hon. Lady the shadow Communities Secretary because it is very important that we have an Opposition and if we do so, she might table the occasional parliamentary question, in which case we would have an opportunity to come to the—

[Hazel Blears]

Will the right hon. Gentleman give way?

[Mr Pickles]

Of course. I am reminded of “Life on Mars”.

[Hazel Blears]

The right hon. Gentleman appears to be floundering a little at the start of his contribution, and I wonder whether I might, in a constructive spirit, offer him a small lifeline. My right hon. Friend the shadow Communities Secretary has made a powerful case against the front-loading of these cuts. As I understand it, there is a surplus of about £3.4 billion in the national non-domestic rate pool, and the leader of my council in Salford, Councillor John Merry, has written to the Secretary of State suggesting an ingenious way of smoothing out the front-loading of these cuts. If we were to put the £3.4 billion back into the formula grant, that would enable us to reduce some of the devastating impact of that first year of cuts, certainly on Salford council, which is facing cuts of £40 million. If the right hon. Gentleman accepts my lifeline I will be very happy.

[Mr Pickles]

I am most grateful to the right hon. Lady for that, and, to start on a positive note, may I say that the entire Front-Bench team likes her new hairstyle?

There is not a £3.5 billion surplus in non-domestic rates in the year coming. There is a potential £2 billion surplus in 2013-14. It is hoped that the new system of local government finance, which I will be making some reference to in the statement, will be in the process of being brought in, so it is theoretical at this stage.

[Caroline Flint]

The right hon. Gentleman teased the House a few seconds ago when he told us to wait and see what the financial settlement provides. Local council leaders have been pressing him to give some hint on, and recognition of, the problem of front-loading and whether that can be looked at. Can he not give some steer that the Government have listened to some of those concerns, because at present they are planning for huge cuts, based on what they expect to have to deliver come April 2011-12?

[Mr Pickles]

May I reassure the right hon. Lady both that we will be making a statement to the House, unlike last year when the statement was relegated to a written ministerial statement, and that we are going to ensure that the distribution is fair?

[Hazel Blears]

Will the right hon. Gentleman give way?

[Mr Pickles]

I want to make some progress first, but I will give way to the right hon. Lady in due course.

It is reasonable for us to have expected to hear in the speech of the right hon. Member for Don Valley how much she would cut from the budget. What percentage reduction does she want from each tier of local government? If she does not like the phasing, which other Department should be cut more next April?

The Opposition have simply lost touch with financial reality. They have got their head in the sand in respect of the urgent need to tackle the nation’s record overdraft and the slide towards a national debt of over £1 trillion. We need to reduce the deficit to keep long-term interest rates down, thereby directly helping families and businesses through the lower cost of loans and mortgages. By reducing spending and restoring the nation’s fiscal credibility, we avoid the massive debt interest bills—over £42 billion a year—which is sucking taxpayers’ money from front-line services.

We had a choice in the most recent spending review: we could face up to the legacy left by Labour—the crippling public debt, the black hole in the nation’s finances—or we could simply let Britain fall into the economic abyss. Looking around Europe, the situation that some of our neighbours continue to face reminds us just how dire the challenges remain.

[Mr Marsden]

Will the right hon. Gentleman give way?

[Mr Pickles]

In a moment.

The financial mess that the coalition has inherited is not just because of big banks; it is because of the irresponsible behaviour of big Government.

[Simon Hughes]

I sincerely hope that all Members, on both sides of the House, realise that local government must do its share of reducing expenditure to deal with the public debt and deficit that we inherited. Will the Secretary of State give me one explanation and one assurance? Will he explain why the comprehensive spending review’s four-year plan set out a greater reduction in the budget in years 1 and 2 than in year 3? Will he reassure me that, as I think Ministers have heard when we have come to see him in the Department, the whole of this year’s funding settlement for local government is being taken into account when the assessment of the reduction is made, not just the direct core funding provided by the grant from central Government?

[Mr Pickles]

My hon. Friend raises a very important point. The rules are different when sums are being reduced, rather than increased, so it is massively important that we examine all the finance available to local authorities and the gap in spending. I am going to address that most carefully, as I shall do for the precise phasing of the amounts. It is sensible to see these sums taken out at the beginning of the period, because the only way in which local government can approach a 26% reduction is not to salami-slice here and there, but to restructure, share services and the like. If it is going to do that, it had best get on with it.

[Mr George Howarth (Knowsley) (Lab)]

On phasing, will the Secretary of State accept that it is hugely important for boroughs such as Knowsley that the process of damping stays in place? If it does not, incredible swings will take place within a year—even greater than those he is proposing.

[Mr Pickles]

The right hon. Gentleman is absolutely right. Hon. Members may not be aware that some authorities, such as Knowsley’s, are heavily dependent on grant; if I recall it correctly, the percentage is in the upper 70s—

[Mr George Howarth]

indicated assent.

[Mr Pickles]

It appears that that is correct. There are other places, such as Surrey, where we are talking about 20%. If we were dealing with a cut across the board, the effect of an amount coming out of Knowsley’s budget would be considerably greater than if it came out of Surrey’s. That would not be desirable and we will be putting together a system that offers help.

Despite all the bluster and all the complaint, the Opposition would have made some of the same choices had they clung on to office. Perhaps Opposition Members would not like to be reminded that the Labour Government were quietly planning cuts of £52 billion over the next four years. The Treasury’s own figures show that those were front-loaded cuts, with a hit of £14 billion to fall in 2011-12. A small amount of those cuts were made public in the dying days of the previous Administration. The back of a fag packet small print of the March 2010 Budget reveals £480 million of cuts. Those were cuts to regional development agency regeneration, cuts to the working neighbourhoods fund, cuts to the local enterprise growth initiative, cuts to the housing and planning delivery grant, cuts to smaller Department for Communities and Local Government programmes and cuts to time-limited community programmes.

Let us deal directly with the issue of the working neighbourhoods fund. Whether the right hon. Member for Don Valley likes it or not, it was a three-year figure; the programme was coming to the end in March and no money was provided for it to be extended thereafter. We would have been facing precisely the same problem as we are now. Some Members have complained about the end of the working neighbourhoods fund, but we would have been facing this in March.

[Stephen Lloyd]

rose—

[Mr Pickles]

As was rightly said by my hon. Friend, to whom I shall give way in a moment, the current Labour leader made it very clear during the election that regeneration spending

“is not the biggest priority we face as we look at other competing priorities”,

and the then Prime Minister said:

“Housing is essentially a private sector activity…I don’t see a need for us to continue with such”

renovation programmes.

[Stephen Lloyd]

In the past 12 months, Eastbourne borough council restructured its senior management, producing a more dynamic and customer-focused team, while cutting the cost of its senior team by £300,000 a year. Does the Secretary of State agree that other local authorities can follow the example of Eastbourne borough council, saving money for the taxpayer and bringing local authority executive pay under control, which was something that Labour singularly failed to do?

[Mr Pickles]

My hon. Friend is right. There is increasingly a trend towards reducing backroom services and I welcome the support from the right hon. Member for Don Valley. Perhaps the clearest message that should go out from the Chamber today is that there is broad consensus on the sharing of services and it would be a very wise chief executive and leader of a council who continued with that process.

Of course, part of the problem is that the so-called operational savings that the Labour party promised were simply not met. When I opened the Department’s books, I noticed that almost £1 billion of planned efficiency savings promised by the Department and announced in the 2007 spending review and the 2009 Budget were never delivered by Labour Ministers.

We know that Labour had secret plans for cuts for local communities, but it did not have a route map to get there through constructive reform. The Labour Government had 13 years to improve the system of local government funding but they fluffed it. They introduced 10 different Acts that affected local government finance. They scrapped capping, then they reintroduced it. They gave pensioners an extra payment for their council tax, then they dropped it. They passed a law to hold a council tax revaluation, and then passed a law to delay it. They published a local government finance Green Paper, then a White Paper, then they held a balance of funding review, and then they held the Lyons inquiry review. They then extended the Lyons inquiry review and when the Lyons inquiry reported, they did not even bother to issue a formal response.

In the 2010 Labour manifesto, we were promised a cross-party commission on local government finance. Perhaps Labour just ran out of ideas and wanted to ask us. The final Labour initiative, with the third leader in three years, is the famous blank piece of paper. No wonder the shadow Housing Minister, the hon. Member for Plymouth, Moor View (Alison Seabeck), has admitted

“we won’t rush into policy making”—

[Interruption.] I am glad she has confirmed that. Perhaps they are waiting for the next Labour leader. I suspect that that will not be long now—like with buses, one waits around for ages and three come along pretty quickly.

[Mr Watts]

Will the Secretary of State give way?

[Mr Pickles]

I am sorry, but if I wanted to visit the 1980s I would watch an episode of “Life on Mars”.

I welcome the opportunity to lay to rest some of the reckless scaremongering that the Labour party has peddled in recent weeks, and particularly in the past few moments. We are a few days away from the settlement and it is important that we do not create a climate in which wacky, fictitious figures end up scaring people unnecessarily without adding anything to the debate.

[Andrew Bridgen]

Does the Secretary of State remember the words of the previous Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling)? Before the last general election, he said that if the Labour Government were re-elected, this country faced the biggest cuts in its history. My right hon. Friend might have noticed that that statement has not been repeated by those on the Opposition Front Bench.

[Mr Pickles]

I do indeed. From what I can understand from what the right hon. Member for Don Valley was saying, it seems that she is in favour of cuts but not specific cuts. She is in favour of financial prudence, but not if it involves cuts to local authority spending.

The key argument about the forthcoming grant reductions is that the right hon. Lady seems to think that they will be unfair. How she can assert that when she does not know what the settlement will be is a mystery to us all. Opposition Front Benchers point to briefing figures from the pressure group SIGOMA—special interest group of municipal authorities—without realising that they are being played. SIGOMA understandably wants to paint a dire picture for its members as part of a lobbying exercise ahead of the settlement. It is playing metropolitan areas off against shire counties.

[Mr Marsden]

The Secretary of State asks why these points are being raised by the Opposition, but he and his colleagues have a record on this issue. The figures and cuts that the Government Front-Bench team produced in June, with the abolition of area-based grants and various other measures, disproportionately hit the parts of the country that we have been talking about.

[Mr Pickles]

The hon. Gentleman is well aware that in the emergency Budget we had to prevent money that had not been paid out from being paid—it is difficult to take money from areas that have not received any at all. He seems to think that we live in a vacuum. Has he seen what has gone on in other parts of the continent and the problems that other Governments face? Had we not taken these decisions we could have found ourselves in precisely the same position.

[Robert Halfon]

Would not councils have had a lot more money in recent years if they had not had to spend millions on ridiculous inspection regimes?

[Mr Pickles]

My hon. Friend is absolutely right. As part of the deal in which local government will have less money and more power, we will reduce the number of unnecessary regimes.

[Hazel Blears]

I am glad that the right hon. Gentleman has got back to reality regarding what, if anything, can be done to mitigate the impact of the cuts on some of the poorest communities. I put to him again the issue of national non-domestic rates. He said that there would not be a surplus until 2012-13.

[Mr Pickles]

No—2013-14.

[Hazel Blears]

Well, the Office for Budget Responsibility’s forecast in the Treasury’s June Budget report indicated that there is likely to be a surplus of £3.4 billion. If that is the case, will the right hon. Gentleman agree now to redistribute the whole of any surplus there might be, as the legislation covering this area provides that any such surplus will be redistributed? That is something practical that he could do to mitigate the effects on the poorest communities.

[Mr Pickles]

I always enjoyed it when the right hon. Lady occupied my role, so I am sorry to tell her that this is not like a deficit; we have to pay down the debt in relation to non-domestic rates, so the money that she suggests will be available will not be available for what she suggests. In case she thinks I am just making a rhetorical point, I am willing to write to her, copying in the right hon. Member for Don Valley, explaining this issue. If £5.5 billion were suddenly available, I think I might have used it by now.

The points that SIGOMA makes could be made by the county councils network, the district councils network, the SPARSE Rural group and my dear chums at the London councils. They could produce similar figures on how the funding system seems to channel more money to certain areas. Before Labour jumps on these bandwagons, it needs to realise that it cannot play the mets against the shires and then campaign honestly at the May district council elections.

[Mr Watts]

rose—

[Mr Pickles]

We will listen to all representations. We are moving to meet the points made by the Local Government Association and other interested parties. We intend to deliver a fair and sustainable settlement that protects the most vulnerable communities and spreads the impact in a manageable way.

[Mr Watts]

Will the Secretary of State give way?

[Mr Pickles]

Of course—I cannot stand it for another moment.

[Mr Watts]

I thank the Secretary of State for giving way. Will he give an undertaking to the House today that any changes in the grant system will be based on academic evidence that takes deprivation into account, or is he intending to fix it as he has in the past?

[Mr Pickles]

The hon. Gentleman seems to have left the 1980s for the 1970s and “Jim’ll Fix It”. There is no intention to fix this or to hit vulnerable communities the hardest. We will be doing our best and I hope that the hon. Gentleman will be ready to praise me next week when we produce our proposals. Frankly, he should take with a pinch of salt some of the more alarmist predictions of jobs cuts that have been fed to the media by the unions and others. Such dossiers are based on looking at local media and projecting them out. We see unions being upset by stories that unions themselves have placed.

Reducing the number of posts is not the same as job cuts, as staffing can be reduced through natural wastage and freezing. The unions have intentionally misled on the issuing of section 188 notices, which allow the terms and conditions of workers to be changed to save money. The GMB has claimed that 26,000 staff in Birmingham face “the threat of redundancy”. Indeed, that would be a shocking figure—26,000 workers faced with redundancy. In fact, the process seeks to reform car allowances and staff parking, and is nothing more than that. It is designed to reduce the scope for redundancies. Even Leon Trotsky at his worst would not have taken to the streets over car parking. Such reforms reduce the scope for redundancies and do not increase them.

[Sir Alan Beith]

Speaking of redundancies, my right hon. Friend has some discretion over the limited amount of money that he has to allow capitalisation of redundancies in those authorities that have low reserves. I ask him to look carefully at Northumberland, whose reserves were low because of a forced reorganisation under the previous Government, and there is a very heavy claim on the county council at present because of the incredible snowfalls that we have had in Northumberland.

[Mr Pickles]

My right hon. Friend makes a good point. We warned about the effects of the various reorganisations, and stopped those intended for Norfolk and for Devon. Where money is tight, we cannot afford to waste it on a reorganisation of local government.

I am actively reviewing the amount available for recapitalisation. Clearly, there will be tough choices. The sharing of services and back-office consolidation will reduce the number of staff posts needed over time. The priority of local government is not to be a municipal job creation scheme, but rather to provide quality front-line services, keep local taxes down, and provide a positive environment for private sector job creation and the expansion of local business.

[Mrs Mary Glindon (North Tyneside) (Lab)]

Will the right hon. Gentleman comment on Pricewaterhouse- Cooper’s statement that for every public sector job lost, a private sector job will be lost too?

[Mr Pickles]

I do not believe the figures. If that is the case, we are beyond economic ruin, because our country has reached a point where we can no longer afford to level off spending. If the hon. Lady would like the United Kingdom to enter the world of Greece and our friends in Ireland—[Interruption.] Let us be fair. What is the biggest problem? Sovereign debt. Which country has the largest sovereign debt? Had my right hon. Friend the Chancellor not taken those brave decisions in the emergency Budget and in the spending review, and if we did not take those brave decisions to their logical conclusion, we would have been in the danger zone. We all know where the Opposition would have been—they would have been running for cover.

[Nic Dakin (Scunthorpe) (Lab)]

I am interested in the Secretary of State’s references to Trotsky and other people, but how many local government workers does he expect to see made redundant at the end of this year on the basis of his policies?

[Mr Pickles]

That is just a typical Labour intervention. It is not about the economy; it is all about getting as many bleeding stumps as possible. What we do know, through research, is that despite the various daft claims made about the number of people being made redundant in Birmingham, for example, the majority are going by way of natural wastage, turnover, mutuals and co-operatives being set up—something that Trotsky would have approved of—voluntary redundancies and early retirement. When it comes down to it, the likelihood is that the number of compulsory redundancies will be less than 4%. Frankly, these things can be managed with a will, and it is our intention that councils will manage them sensibly.

Owing to Labour’s planned cuts and the dire state of the public finances, the vast majority of councils have seen these difficult and challenging times coming, and they have been making sensible, constructive plans to address them. I want to support them with action, not meaningless words. I can make councillors’ and councils’ jobs a lot easier by scrapping regulations, tearing up unnecessary guidance and cutting through red tape. The Government are restoring real democratic accountability to local government, giving the power, the freedom and the authority to those who actually make the decisions. We have to be realistic. We realise that there is less money, but unlike the former Government, I do not intend to tell councils how they should spend it. The money given in this settlement will not come with strings attached. As we said during the spending review, with very few exceptions we have ended the ring-fencing of grants, so that councils can decide for themselves how their money should be prioritised and spent.

Under the spending review, we will allow councils to borrow against future business rates. We are also introducing powerful new financial incentives for councils, such as the new homes bonus. In addition, there is the £20 million through capitalisation, referred to by my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith). Councils can top that up with the sensible use of their £10 billion of reserves—they were prudent and repaired the roof when the sun was shining, unlike Labour, and they can now spend that money when it is rainy. There are a whole range of measures that proactive councils can take—for example, improving transparency, sharing services, cutting out waste, improving procurement practice and bringing senior pay under control.

[Joan Ruddock]

May I tell the Secretary of State that my council of Lewisham has done all the things that he has just mentioned? Over the past five years, it has saved £40 million through efficiency savings. He made the point about jobs. Let me tell him that the council has just taken a decision to cut £16 million from the budget. That would cost 300 jobs, but only 50% of them could be found through natural wastage. However, the council tells me that front-loading means that it will not be able to plan to get down even to that level, let alone the 4% that the Secretary of State has just spoken about.

[Mr Pickles]

The right hon. Lady’s council has just £1 million short of £60 million in reserve. The decision that has been taken is its own, and I would urge it now to look at other measures. I would urge the council to look towards a joint—[Interruption.] It might not be for the right hon. Lady—I know she lives a champagne lifestyle—but £60 million is a lot of money. Let the council look towards sharing a chief executive, or sharing an education authority or planning authority. Let it look at working together right across back-office services.

At the heart of the settlement, we want to ensure the protection of hard-working families and pensioners; support for vulnerable individuals; help for vulnerable communities; and fairness, for both north and south, and rural and urban England. Practical policies to protect the vulnerable include: £1 billion in extra grant for social care and a further £1 billion from the NHS; a new role for councils in public health, backed up with extra funding; £2 billion for decent homes, improving the quality of life for those in poor-quality housing; and £6.5 billion to support people and allow the vulnerable to lead independent lives. Labour talks about fairness, but when it was in government council tax more than doubled—in some years, above inflation—thanks to fiddled funding and unfunded burdens.

[Caroline Flint]

The right hon. Gentleman mentions funding for public health, which is estimated to represent at least 4% of the NHS budget. Will that move across to local government?

[Mr Pickles]

The right hon. Lady is playing a game whereby if money moves from the health service it represents a cut in the health service, but if it moves to local authorities it fills a hole. Conservative Members have been saying for years that there is a role for councils in public health, and we are backing that. I recall, at the Opposition Dispatch Box, asking the then Government for the kind of financial commitments that we are currently giving to deal with adult social care. Frankly, the right hon. Lady should be thanking us—[Interruption.] Well, I’m glad you’re supporting it. Just get behind the programme then, dear. That’d be marvellous.

Working families, pensioners and, indeed, the squeezed middle were hit the hardest. The hikes were equivalent to 3.5p on income tax, and the Labour Government were planning further local tax rises, as their local government manifesto for a fourth term revealed: removing the retail prices index cap on business rates, hammering local high streets; a council tax revaluation and rebanding, hitting cash-poor pensioners; and new taxes to empty bins, punishing struggling families. Labour’s answer to every policy problem was an extra rise in tax or more red tape. But, in six months, the new Government have scrapped Labour’s bin taxes, called off the council tax revaluation, increased small business rate relief and found £650 million a year of funding in each of the next four years to help to freeze council tax next year. Let me make it clear: that is completely new money; it is not top-sliced.

I intend this settlement to be the last ever to rely on such a complex and outdated system, which is not fit for purpose. It has trapped too many councils, making them financially dependent on central Government, and there is no incentive for them to invest in their local economy, given that the proceeds simply vanish to central Government to share out nationally. It makes planning difficult, weakens local accountability and stifles local innovation. It is part of the same trend that has led to some areas of the country becoming almost completely dependent on the public sector.

All that will become clearer when I present the full settlement to the House, but let me reassure Members that I and my ministerial team are doing everything possible to ensure that local government has a fair and sustainable settlement, to the good of the country and to the good of local communities.

17:08

[Andrew Gwynne (Denton and Reddish) (Lab)]

May I take this opportunity to thank you, Mr Deputy Speaker, for allowing me to speak in this important Opposition day debate? I am pleased to follow the Secretary of State, who, in his calm Yorkshire way, said not a lot. What he did say, however, will send a chill through communities in my constituency.

The Conservative-Liberal Democrat Government’s cuts will clearly have an effect on all constituencies, but I believe they will impact more unfairly on areas with additional social need, such as my constituency in Greater Manchester. I benefit from representing a constituency that covers two very different local authorities, Stockport and Tameside metropolitan boroughs, and, although both authorities plan major reductions in spending in the years ahead, I fear that the cuts will impact particularly on Tameside, which has been ranked as an area of high deprivation and the 56th most deprived local authority area in England.

People in Tameside earn lower incomes than the national average, and in their time of need they might find themselves calling on council services, just when the council is least able to assist them because the massive reduction in its overall budgets will impact on those crucial services. To be fair, it is a similar story with the two Reddish wards in the Stockport part of my constituency. Although those wards are located in a much more prosperous borough overall, they are also areas of very high social need.

[Duncan Hames (Chippenham) (LD)]

The hon. Gentleman makes a very interesting point about how poverty can be localised much more than on the basis of local authority area. Does he accept that that is a shortcoming of local government finance in the past? The assumption has been that an area is either poor across the whole of the local authority or not at all?

[Andrew Gwynne]

For the past 13 years of the Labour Government, Stockport received additional money because of those deprived Stockport wards. It is a shame that the Liberal Democrat council chose not to spend the money in Reddish and in those wards.

It is true that we are facing one of the worst rounds of spending contraction ever experienced. That is likely to have a massive impact on every part of our public services, not just local government. However, we should not forget that local government provides, or co-ordinates, the delivery of some of the most valued public services—from children’s services to adult social care, from leisure, parks and libraries to schools and from fixing roads and pavements to public transport and refuse collection.

I am concerned about how the cuts are being implemented and their unfairness to more socially deprived areas. My constituents in Tameside and Stockport accept that there needs to be a reduction in public spending and that local government must play its part, but it is certainly difficult to see any fairness—as was promised in the comprehensive spending review—in the fact that some councils in the most deprived areas will have reductions in their budgets next year of, as has been suggested, up to 25%, 30% or more, whereas other councils—many in the south—will feel the impact of those reductions far less.

Research from SIGOMA, a group of 44 metropolitan and unitary authorities outside London—I know the Secretary of State’s view on that grouping—demonstrates that the councils that expect to be worst hit by the CSR are in the 20% most deprived areas. Clearly we know that the cuts will hit places such as Denton and Reddish very hard indeed.

Tameside council is planning for a total funding reduction of around £100 million over the next four years—a massive amount for one fairly small metropolitan borough to lose. We also know the cuts are being front-loaded, so Tameside council will need to save more than £37 million next year. It must save more in one year than it has saved over the past seven, despite making extremely tough choices to meet its Gershon savings. There is very little meat left on the bone. These cuts will hurt our services. Ultimately, the proposed cuts will mean a reduction in Tameside council’s work force of about 800 over the next four years.

[Gavin Barwell (Croydon Central) (Con)]

The hon. Gentleman is speaking up for his constituents, and he is to be applauded for that. He says that there is very little meat left on the bone in Tameside. What will he say to my constituents when they realise that under the previous Labour Government Tameside received a real-terms increase over the past five years, whereas Croydon received a real-terms cut of 3%?

[Andrew Gwynne]

I am not sure that those figures are correct. However, if that is what the hon. Gentleman says, people in Croydon should vote Labour. When combined with the new year rise in VAT, it is clear these cuts and the impact they will have on public services mean that those people with the least—especially the elderly and most vulnerable—will pay more and lose the most.

I have had sight of recent research showing the overall impact of the Government’s spending plans on local authorities, including Tameside. It calculates that from 2014-15, as my constituents make their contribution to the Government’s deficit reduction, Tameside’s economy will lose £50 million a year. It also shows that residents of working age will, on average, contribute £39.79 per person compared with the Chancellor’s constituency of Tatton, where residents will contribute only £22.62 per head, or those living in Kensington and Chelsea, who will contribute just £5.91 per head.

[George Hollingbery (Meon Valley) (Con)]

I congratulate the hon. Gentleman on defending the constituents whom he so ably represents. He can, of course, cherry-pick statistics as he wishes, but I should like to let him know what is happening in part of my constituency. East Hampshire district council—the provenance of these statistics, incidentally, is the council itself, and they are historical—has seen a 25% real-terms reduction in the grant from central Government over the past 10 years. Does he think that that is fair?

[Andrew Gwynne]

Of course, the hon. Gentleman makes the case for his area, but I would say that areas such as Tameside, which I represent, do not have the capacity to raise the money locally, so they suffer disproportionately when central Government grants are cut in the way proposed by this Government.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

rose—

[Andrew Bingham (High Peak) (Con)]

rose—

[Andrew Gwynne]

I will not give way—I want to make some progress.

It is a similar story when we look at the changes to long-term sickness benefit, which is being cut by £2 billion a year. Tameside will lose £11 million a year: £85.14 per head of the working age population, compared with £45.18 for Tatton or £13.18 for Kensington and Chelsea. This is hugely unfair, and it clearly illustrates who is bearing the brunt of the spending reductions.

Let me turn to how the Stockport part of my constituency will be affected. The Liberal Democrats who run Stockport council are being very evasive—to put it politely. We know that they have to make about £20 million of cuts next year, but so far they have announced only £15 million—they will not yet say where the other £5 million will come from. That uncertainty is chronically unfair on their dedicated and hard-working work force. I find it ironic that the Liberal Democrats tabled one council motion after another condemning Labour’s grant settlements—real-terms increases, year on year, on a frequent basis. Since their Government announced cuts, there has been not a single peep from any of their councillors. Nobody likes to be unpopular, least of all the Liberal Democrats, who have become past masters at blaming somebody else, but they are not being straight with the people of Stockport about where the axe will fall and what the impact will be on front-line services. Instead, they are using convenient managerial phrases such as “service redesign”, “restructure” and “reprioritise” when they really mean cuts.

Cuts on this scale mean big job losses. Only last week, Stockport council announced 250 job losses, which will mean unprecedented reductions in services that will be felt in every corner of our community—although given the previous form of Stockport Liberal Democrats, no doubt many of the cuts will hit the Reddish wards in my constituency hardest.

There is suspicion about where the axe will fall next. It is alleged, for example, that all the youth centres will be closed, including the one in Reddish, which does an invaluable job in keeping young people engaged with their education and away from trouble. This is a wider problem within the coalition Government and their ill thought-out plans regarding local government finance. How can they possibly create the so-called big society when the voluntary sector, which will be fundamental to it, will face such substantial reductions in its core funding as these local government cuts start to bite hard? Of course, as we heard earlier, many workers in the public and voluntary sectors are women who work in the heart of our communities as teaching assistants, care assistants, school crossing patrollers and dinner ladies. It is truly hypocritical of the coalition Government to talk about the big society, and then to attack ordinary people working in their local communities in a range of important jobs.

It is perhaps not sufficiently understood that many jobs in the private sector are dependent on local government and public sector funding. Demand will be taken out of the local economy, so many retail and service companies will suffer. Tameside pioneered a scheme called Tameside Works First that prioritised the granting of smaller contracts to local companies to assist them through the downturn, helping local companies such as Denton-based Anvil Masters, which provided new park railings for Granada park in the town. Tameside should be lauded for pioneering such a scheme. However, the cuts will have a ripple effect in the private sector in my constituency and in every constituency.

Finally, the poorest, those who are most at risk and those who are most in need in our communities will be affected heavily by the cuts to council services. Some of the same people will be affected by the cuts to housing benefit. Recent research has shown that about 3,700 people in Tameside and 3,600 people in Stockport will lose out because of the proposed changes to housing benefit, some by as much as £42 a week. We should not forget that since the economic downturn, some households will have lost a wage and some people will have moved to lower paid jobs. That means that there are now even more low-paid families and that even more help is needed from local council services, at a time when councils are least able to help.

There is an emerging pattern across the country of who will be affected the most by local government cuts and the changes to the way in which central Government funds are handed out to councils: poorer areas in cities and metropolitan boroughs will face the brunt. The Labour Government had a strong record of increasing funding for local authorities in such areas, and of using those authorities to deliver national priorities by harnessing the best locally. Worse still, it is clear to all Labour Members that the Government have taken no account of how areas such as Denton and Reddish will fare with the massive reductions in spending. Sadly, we face a bleak future with trepidation.

17:21

[Sheryll Murray (South East Cornwall) (Con)]

Thank you, Mr Deputy Speaker, for allowing me to catch your eye in this important debate.

Having served as a local councillor for a number of years before coming to this place, I praise the Secretary of State for deciding to free local councils from the chains of red tape that stifled local government throughout the years of the Labour Administration. In the current economic climate, there is no doubt that there will be pain and that it will apply to local government as much as to any other area.

Last Friday, my local council in Cornwall adopted an emergency budget and took the early initiative to consider where savings might be made before the settlement announcement. It is predicted that the cost of delaying that decision would have been £55,000 a day. Sadly, opposition parties in Cornwall were promoting further meetings and the delaying of decisions. Ten days of delay would have cost £500,000 and twenty days of delay would have cost £1 million. Opposition parties seem to be engaging in delaying tactics just for the sake of it.

I ask the Secretary of State to note that, on the creation of the new unitary council, the authority inherited a significant number of reserves that were held for specific reasons. Most came with a variety of commitments against them and, as such, remained untouched last year, although there was a minor review through which some reserves were swept up corporately. A new strategy has been introduced, the main theme of which is to reduce radically the number of reserves that are held; to manage all capital reserves centrally as part of the corporate approach to capital financing; to create one budget equalisation reserve per directorate to allow minor budget variations to be funded without recourse to the corporate centre; and to ensure that the authority’s general reserve is sufficient.

The council acknowledges the need to consider alternative models of service delivery, including trusts, joint ventures and arm’s length management organisations, some of which involve services being delivered in partnership with the private sector.

[Justin Tomlinson (North Swindon) (Con)]

On the sharing of services and facilities, does my hon. Friend agree that we must work across service areas with neighbouring authorities and external organisations to deliver value for money and to drive up standards?

[Sheryll Murray]

Absolutely. I wholeheartedly agree with my hon. Friend.

The arm’s length companies will remain under the direct control of the council, but will free up trade with partners and trade outside our borders to bring more business into Cornwall. An example of that shared service is that back-office corporate support functions will be brought together in a single organisation alongside the council’s customer-facing front desk. That new organisation, although council controlled, will be able to sell its services to other partners within and outside Cornwall, generating more investment in our local economy. That will not only safeguard jobs in Cornwall but give the council a vehicle to create new employment opportunities: integrating those services will alone generate £2.7 million of savings.

Other ways of working include outsourcing, which is where organisational functions that could be delivered by in-house teams are contracted out to external organisations. The council has no intention of widespread outsourcing, but it will explore that option where it makes sense and delivers the best solution for local taxpayers.

Social enterprise is another likely model for service delivery, particularly in relation to the integration of health and social care services. Developing new models of service delivery is a radical shift, and the council has said that it will explore the details further in a series of business cases. It has said that it has a major role to play in decisions on how local health services will operate in future. It is keen to benefit from joint commissioning of care services and take the lead through its statutory role in health and well-being. Adult care services could be integrated into health services and new social enterprises, and public health services will become part of the council. The council will offer to provide a joined-up support service for GP consortiums, and there will be an integrated children’s service led by the council.

In Cornwall, the council has been talking about public sector reform for some time. It is resourceful and pragmatic, and it can deliver the big society.

17:27

[Mrs Mary Glindon (North Tyneside) (Lab)]

The Secretary of State recently said that councils should use the cuts as an

“opportunity to completely rethink everything they are doing, creating a modern, flexible and innovative council.”

I was a councillor for 15 years in North Tyneside, and that is nothing new to me. The big society and localism are just about reinventing the wheel, because many of us who were local councillors in the past know how hard councillors work and how much they have done to use their budgets wisely.

During my 15 years as a councillor I saw many changes. At first, I was a councillor under the former Tory Government, and when Labour took power in 1997, it was good to see changes such as how we were able to bring houses up to the decent homes standard over 10 years, and to see our neglected schools change, becoming new or refurbished buildings and providing fantastic places in which to educate our children. There was Sure Start, and in my borough there were new swimming pools. We were also able to put in place the “Fuel for kids” scheme, giving children a free breakfast at the start of the school day. For many children, that made a difference to their learning ability, and there is empirical evidence to prove that.

We were able to do many of those things when we moved to a mayoral system and had a progressive Labour mayor, who followed two years of a Tory mayor. Under the Tories many services were cut, and in fact the voluntary sector service in which I worked was closed. When we got our progressive Labour mayor, John Harrison, all the things that I have referred to flourished.

Just over a year ago, the previous Tory mayor was re-elected, and, as he has mentioned in the House, she happens to be a favourite of the Secretary of State. That Tory mayor, when leader of the council opposition, wrote to the then Housing Minister and asked him to withdraw £100 million of credits that were to be given to the Labour council to build older people’s homes for the future—she simply did not want that done. Since taking office, she has drastically reduced that project, which means we will see not new, fantastic, refurbished properties, but old houses simply remodelled not to the standard people wanted. She has also prevented 800 new council houses from being built with money that would have come from the former Labour Government, because she did not want it to happen in her end of the borough.

It is interesting to see how, until tonight, the mayor has fought against so much that Labour put in place and praised the new Government. The mayor I am talking about is Mayor Arkley, and tonight, in North Tyneside’s section of the Newcastle Evening Chronicle, she is pleading with her Government to have a change of heart. She has urged Treasury and other Ministers

“to think again about the speed of the cuts”.

[Tom Blenkinsop]

It is not just in Tyneside and the north-east where Conservatives are vocally opposing the Government’s measures; it is also in Teesside, where the Conservative leader of Stockton council, Ken Lupton, has said that the Con-Dem Government’s position on the cuts is wrong. Also, Mayor Mallon from Middlesbrough —an independent, and not necessarily a loving friend of the Labour party—has said that the Conservative party and Liberal Democrats have declared war on the north.

[Mrs Glindon]

My hon. Friend is right. It is good to see those people waking up to the realities of these deep cuts.

On this occasion, I would like to join our Tory mayor in pleading with the Government. She said:

“At a recent meeting with an official from HM Treasury, I have requested officials to reconsider this issue and spread the reductions more evenly over the four-year period of the Spending Review and to allow additional freedoms to local authorities to capitalise redundancy and equal payments to enable more effective planning to take place for workforce changes”.

I ask that Ministers listen not just to the Opposition, but to their own party members, who are trying to deliver a service and believe that the cuts are too deep, too soon.

17:33

[Heather Wheeler (South Derbyshire) (Con)]

I declare an interest, because I am still a councillor on South Derbyshire district council and am married to the new council leader. I was leader myself for three years, and was previously a councillor there for 15 years—it seems to be a popular choice. Prior to that, for four years, I was a councillor on Wandsworth council. My antecedents in local government are strong and long. I have an abiding love for it.

I am appalled at tonight’s debate. It is astonishing that yet again we have hour after hour of prime television in which all the Labour lot do is scaremonger—it is hour in, hour out. There is no substance to what they say, because of the appalling way Labour councils have run areas year after year. They have never considered value for money for their taxpayers.

[Tom Blenkinsop]

By the sound of it, the hon. Lady has a great record in local government in South Derbyshire, so she will be aware of the Gershon savings over the past five years, under which 3% to 5% of council tax spending was looked at in terms of savings across the board. In my area, that has led to significant savings over the past five years.

[Heather Wheeler]

Of course, I know about the Gershon savings. I also remember the squeals about it and the synthetic savings that were made. The opportunity was not taken to look root and branch at what local councils need to do and should do, at the way they should do it and at the value for money they provide for their residents. It is hugely important that people take an innovative look at the way in which local councils work, and that they take this opportunity. The whole country is in a financial crisis, and nobody should be in position where they do not have to take their percentage of it. That would be completely wrong.

The new coalition Government are going to look at the floors and ceilings, the caps, the huge amount of ridiculous comprehensive area assessment-type targets, and the millions of pounds that all our councils have had to spend on this sort of thing. This coalition Government are about freeing people up to organise themselves in such a way that they provide the vital services that their people want at the same time as having the guts to say, “We don’t want to do that any more. We’ll have a referendum on it. Do you agree with us?” In our council in South Derbyshire, 1% on the rates raises £50,000. Given the floors and ceilings that I have had to put up with for the past 13 years of the Labour Government, we have easily lost £2 million there. The same goes for the fire authority in Derbyshire, and the police authority as well.

[Mr Watts]

May I inform the hon. Lady that those floors were introduced to protect her local authority? Local authorities such as St Helens should have received a far bigger grant allocation every year, but we did not put right what the previous Tory Government had done, which was to take money from the most deprived parts of the community and give it to the most affluent parts.

[Heather Wheeler]

That is a really interesting point. All I know is that I have lost £2 million in South Derbyshire. I do not know whether it should have been £2.5 million or £0.5 million; I know that I lost £2 million.

[Gavin Barwell]

I should just like to put the record straight, following that previous intervention. According to the House of Commons Library, two of the local authorities that did worst, along with my own council, over the past five years under the previous Labour Government were Newcastle upon Tyne and Liverpool.

[Heather Wheeler]

That was a very helpful intervention. Fortunately, someone has some facts at their fingertips, rather than the usual pure emotion.

[Mr Watts]

The hon. Lady and the hon. Member for Croydon Central (Gavin Barwell) need to understand the amount of money that has gone into Liverpool. Under the Labour Administration, many millions of pounds went into the regeneration of the city. The Labour Government had a good record on Liverpool city council.

[Heather Wheeler]

What an amazing situation. We are completely blind to the reality of what has been going on. The ratepayers of South Derbyshire also know about how much money comes in. They were used to council tax rises of 9%, 13% and 17%, which was absolutely outrageous for hard-working families. It was completely ridiculous. We were left to fend for ourselves, and it just was not good enough.

The new localism Bill, and the new arrangements for the rate support grant, will have a major effect on what we do. We will be able to do away with the horrendous top-down targets that our accountancy and finance staff used to spend hundreds of hours dealing with. All of that will be swept away, and thank goodness for that. I am really looking forward to the announcements just before Christmas. There is one more Christmas present that the Minister can give me, relating to Gypsies and Travellers, but we can talk about that another time. We have had to put up with scaremongering for the last however many hours, and the debate is to go on until 10 o’clock, apparently, so goodness knows what else the Opposition will come up with.

[Tom Blenkinsop]

Those were not my words that I mentioned earlier; they were the words of Ken Lupton, the Conservative leader of Stockton borough council. He has said that the proposals were wrong.

[Heather Wheeler]

If the hon. Gentleman would like to phone me later, I will sort him out.

It really takes the biscuit that we can sit here, having had 13 years of local government being raped by top-down targets, London telling us how we have to do stuff, ignoring local priorities and spending hour after hour on a meaningless load of nonsense including having different languages printed on council papers all the time—

[Tom Blenkinsop]

rose—

[Heather Wheeler]

No, I think that I have given way enough. It is a delight to hear the hon. Gentleman, but perhaps another time.

I am really pleased that the Ministers have given robust answers from the Dispatch Box, and I look forward to hearing some quieter comments later on, along with some apologies from the Labour party for what we have had to put up with for the past 13 years.

17:39

[Mr Gordon Marsden (Blackpool South) (Lab)]

It is a pleasure, albeit a sad one, to speak in this debate about the impact that this Government’s policies have had on my constituency and my local authority. I speak not only for Blackpool, however, but on behalf of many other seaside and coastal towns that have suffered disproportionately under the policies of the Minister’s Department and the Government since they were formed—I will not say since they were elected—in May.

As many Members know, Blackpool and many other seaside towns have always had significant problems that are not just particular to them, but are greatly emphasised. The problems are connected with mobility and transience, and they often have severe pockets of deprivation. It is to the last Government’s credit that significant attempts were made to ameliorate the situation both through spending formulae and through the working neighbourhoods fund, area-based grants, the local enterprise growth initiative, the sea change programme and others. They helped to soften some of the particular problems faced by those areas.

[Mr Marcus Jones (Nuneaton) (Con)]

Will the hon. Gentleman give way?

[Mr Marsden]

Not at this point, but I may do later.

I shall not stray far from the motion before us, but I want to mention, in passing, the significant assistance provided by the Northwest Regional Development Agency, and the same point applies to seaside and coastal towns elsewhere.

[Brandon Lewis (Great Yarmouth) (Con)]

Will the hon. Gentleman give way?

[Mr Marsden]

I would like to make a little progress before giving way. As I was saying, the regional development agencies provided a significant benefit.

What has happened since June this year? First, we had the area-based grants cuts in the emergency Budget. If we look at the figures on the cuts in seaside and coastal towns generally, and particularly at those in Blackpool, we find that in most cases the cuts were twice the level of those made in other areas. It is not necessary to take just my word for it; let me cite the words of Peter Callow, the leader of Conservative-controlled Blackpool council. On Radio Lancashire, commenting on the cuts, he said that

“it is 33 million for a part year remember which equates to £4 million for the whole year, that is a sizeable sum and what I have got to explain to government and what I am doing is saying look behind the glitz and the glamour of Blackpool there is deprivation, we are one of the most deprived areas in the land and we shouldn’t be singled out like this, I understand some of the leafy lanes of Surrey and places have got away with it, well that can’t be right”.

That is what the leader of our Conservative-controlled council said back in June.

[Lyn Brown]

I am interested in the point my hon. Friend is developing. I understand that Newham council is likely to lose approximately £70 million over three years. Newham, as my hon. Friend will know, has the sixth highest level of deprivation in the country. Richmond, on the other hand—I am sure we all who know who represents that constituency—is to lose only about 9% of its net grant, which amounts to only £4.6 million.

[Mr Marsden]

I am grateful for that intervention, in which my hon. Friend highlights the disparities that can arise between two boroughs in a relatively small geographical area in London. Those disparities, of course, have been reflected elsewhere. Blackpool had the cuts I mentioned, for example. Then we had the spending review.

I see in his place the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill). When he was tackled on these issues during questions immediately following the spending review, he came up with the immortal phrase:

“Those in greatest need ultimately bear the burden of paying off the debt which this country has been left”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]

If there were ever a Freudian slip to demonstrate the position of Conservative Members, who want to punish deprived areas for the problems they face, that was it.

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

The hon. Gentleman could at least quote me properly. He should remember that I said that that would be the case if the deficit were not paid down. We are paying down the deficit precisely to protect the most vulnerable—something that his party singularly failed to do.

[Mr Marsden]

If the Minister consults the Hansard report of the day in question, he will see that he said what I have quoted, that Mr Speaker said “Order”, and that we moved on to other subjects. There was no reference to what he had said.

The spending review speaks of front-loading, and we heard—unusually, coming from a blunt Yorkshireman—some quite waffly references to it by the Secretary of State. We must wait to find out whether all the waffle produces anything, but I can tell the house that the abolition of the area-based grants, and the effective abolition of the working neighbourhoods fund in the second spending review, have had a devastating effect on towns such as Blackpool, not least because—as was pointed out earlier—it is not just a question of what the working neighbourhoods fund did for the public sector, but of what it was also able to do for the private sector in conjunction with that.

We in Blackpool, like those in several other areas, have experienced a double whammy. We have also been left off the list of areas that will receive funds for decent homes, although our borough and community feature on the index of local deprivation as the 12th most deprived in the country.

Labour Members and, to be fair, one or two Government Members have talked of the knock-on effect on other services. In my area the Connexion service, youth services and other services of that nature have already suffered badly, and are likely to continue to suffer badly if anything like the 16% overall cut that is currently being proposed for Blackpool borough council is imposed.

At this year’s Labour party conference, I went to a fringe meeting that had been organised by Action for Children. It was a good, non-party-political meeting, which discussed the involvement of young people in their local communities. It was attended by some very good youth workers from all over the north-west. Virtually all those people, who were doing good work in their communities, had already lost their jobs or were about to do so, either because of the abolition of the future jobs fund or because of cuts resulting from the area-based grant system.

In case Government Members think that this is simply a bit of propaganda from the Opposition, let me remind them what the chief executive of Blackpool council wrote to me in a letter back in July about the reduction in revenue and capital support. He spoke of cuts of £3 million in the area base grant, £1.3 million in education, £731,000 in local enterprise growth initiatives, £116,000 in Supporting People, and £526,000 in the working neighbourhoods fund. The list could go on. In fact, the north-west generally faced the biggest share of the £1.17 billion of local authority cuts that were announced in June. It lost £1 of every £6 that was cut across the United Kingdom.

[Gordon Birtwistle (Burnley) (LD)]

I was a Burnley councillor for many years. We had the working neighbourhoods fund, but we were well aware that it would end this year. Were Blackpool councillors not aware of that? We made provision for it.

[Mr Marsden]

I thank the hon. Gentleman for his comments. I understand that he wishes to mitigate some of the criticism that his own councillors have made of the various settlements, but I remind him that the cuts in area-based grant had to be effected in year, in this year, quite apart from what would happen after 2011.

[Mr Watts]

The Government keep talking about the three-year period for the working neighbourhoods fund. At that stage we had a three-year settlement, so all grants were based on three years, not just this one.

[Mr Marsden]

I am indebted to my hon. Friend. He is, of course, absolutely right.

[Lyn Brown]

Will my hon. Friend give way one last time?

[Mr Marsden]

Very briefly.

[Lyn Brown]

I thank my hon. Friend, who has been most generous. Does he agree that the withdrawal of the working neighbourhoods fund is a false economy? Getting just one single parent into employment through the use of the fund saves the public purse about £5,300 per year.

[Mr Marsden]

My hon. Friend is absolutely right. In common with many other seaside and coastal towns, Blackpool has a lot of small businesses and micro-businesses, and they are precisely the kind of businesses that benefited from the application of the working neighbourhoods fund and who are now suffering as a result of its potential withdrawal.

I want to talk about the situation in Blackpool as it is now. My local authority has told me that, on the basis of a 16% cut, it is looking for cuts of £32 million in its overall budget. Unsurprisingly, that led the leader of Blackpool council to write to the Secretary of State—he has been having quite a sustained correspondence with the Secretary of State, but without a great deal of success. On 6 October he said that he had written in June to highlight the disproportionate impact that the first tranche of funding cuts was having on a needy and deprived local authority and to make a plea that the autumn comprehensive spending review considered a more equitable sharing of any other pain. It did not do that, of course, and he then felt constrained to write again on 5 November saying that his assessment and that of many of his colleagues is that the front loading of formula grant cuts will have an adverse effect of between 12% to 16% next year, which is very significant. He said that there was the anticipation of major job losses in 2011-12 alone and that for a town like Blackpool, where nearly 30% of the working population are currently employed by the public sector and which has seen a 91% increase in JSA over the last two years, such a radical step reduction in central funding would have a catastrophic effect on the local economy. He said that he fully understood the need to reduce the overall deficit over the four-year period but he urged the Government to reconsider their approach prior to the announcement of that provisional settlement in early December.

That is also what all my party colleagues are urging. We are not suggesting that the Secretary of State has a magic wand he can wave to solve all the problems—not that I have ever seen him in Christmas panto. Rather, we are talking about sensible settlements.

We are also talking about the cumulative effect of what this Government have done, because it is not just about the cuts in the working neighbourhoods fund or local government cuts. It is also about what is being done in respect of education maintenance allowances. Some 2,500 young people in Blackpool are now going to be deprived. I went to my sixth-form college last week, where I met the brightest group of first-year sixth formers—all of them girls, incidentally. I have been meeting them for some time. They were all full of enthusiasm for where they were going, and they had all come through the Aimhigher programme. They were also all—bar one, I think—in receipt of EMA, and, of course, they were the last cohort to be receiving that. We are therefore talking about this whole conglomeration of subjects.

The fact is that, even if the Secretary of State believes he has made a significant impact on the current situation, that is not what the journalists are saying. On 25 November, the Local Government Chronicle said that the Secretary of State

“has been rebuffed in a last-ditch plea to the Treasury for funding...Sources close to chief secretary to the Treasury Danny Alexander”—

who was obviously not singing from the same hymn sheet as the Secretary of State today—

“confirmed that the Secretary of State made an unsuccessful plea for more cash earlier this month to mitigate the impact of front-loaded local government cuts.”

The Secretary of State was singing a cheerful song today, but whether he was whistling to keep his spirits up, we will wait to see with the local government settlement.

When we move aside all the statistics, we are talking about the impact of real cuts on real people. I want to conclude by sharing with the House the account of a visit I made to a project in the summer. It is a community garden in a very deprived area in the centre of Blackpool. Everybody had worked hard on it, but the efforts had been co-ordinated by a woman from the council who had worked with the police community support officers and the residents association. The mayor attended, and we all had a wonderful afternoon. At the end the woman from the council came forward and said a few things, and we were then all told to put our hands together and give her a big round of applause because it was her last day. Why was it her last day? It was her last day because she was one of the people losing their job under the area-based grants cut that this Government have brought forward. I do not want—and I am sure many other Members do not want this either—to spend the next 12 months going around my constituency from worthy project to worthy project having similar experiences. Therefore, despite the philosophical and ideological differences between the Government and Opposition Members, I urge the Government to think again. They should look again at the disproportionate effect these policies are having on some of our most deprived communities.

17:49

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

I am pleased to have this opportunity to speak in a debate on local government. As I said in an intervention on the shadow Secretary of State, local government is very important, as is funding local government properly, and I think it is perfectly proper for the Labour Opposition to choose the funding settlement for local government as the general subject for an Opposition-day debate. The title of the debate is therefore entirely appropriate; we should debate the distribution of local government funding and the effects of changes to it.

The only real matter of dispute that I have with the right hon. Lady and her colleagues is that many of them are making comments today as if the settlement had been announced, when instead we are, I hope, using our last chance to tell Ministers what we would like to happen. A whole succession of colleagues on the Labour Back Benches have reeled off figures as if they were the final settlement, and one has complained that one of his councils has not finally decided what cuts it should make. The hon. Member for Denton and Reddish (Andrew Gwynne) complained that Stockport council has not finalised that. My hon. Friend the Member for Cheadle (Mark Hunter) used to be the leader of Stockport council. Those of us who know that council, and many other councils, well understand that it has not yet finalised its budget—and neither has my local authority, which happens to be run by Labour, whereas Stockport is run by Liberal Democrats. They are waiting—

[Lyn Brown]

Will the hon. Gentleman give way?

[Simon Hughes]

No, the hon. Lady entered the Chamber only a few minutes ago and has already intervened twice, and I want to deal with the contributions that have been made.

Most councils wait until the provisional settlement, which will be announced next week, after which they make representations if they feel it is not fair or appropriate, and then there is a final settlement. Of course there is planning for a budget, but today’s debate is an opportunity for us not to be doom-mongers about decisions that have not been taken, but to make sure we put cases and arguments publicly, that some of us have been making to Ministers and colleagues privately, as to what we believe will be the best possible settlement in the difficult financial circumstances of the time.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

As the hon. Gentleman is accusing the Opposition of saying things in a particular way, we must be clear that local councils have been pleading with Department for Communities and Local Government Ministers for a steer on this because of the unprecedented level of cuts. The comprehensive spending review clearly shows front loading, yet the Secretary of State today still calls that fiction and will still not answer questions. Does the hon. Gentleman not agree that it is right that when councils ask for a steer they should be given a steer, yet we are still not getting a single answer from Ministers?

[Simon Hughes]

Of course councils make representations both collectively and singly and, understandably, once councils of all parties, including those run by Liberal Democrats, heard the announcement of the CSR in October, they told the Government that they thought the front loading of the four-year settlement was not as desirable as a more evenly spread reduction. I share that view. I intervened on the Secretary of State asking him if there was an opportunity to have a flatter reduction over the four years. He did not give a final answer because, of course, that is a decision that will be left until the formal announcement, but he indicated—I agree it was not definitive—

[Caroline Flint]

rose—

[Simon Hughes]

Wait a minute; I want to deal with the question from the right hon. Lady’s colleague first.

The Secretary of State indicated that he was understanding of that point, and it is clear that the Government have done work to see if they can mitigate the effects of a more severe front loading. I, like others, will wait to see the outcome of that. I hope it will be possible to mitigate the effects. If it is, that will be a major achievement; if it is not, it is to be regretted. However, there are many good things about the settlement so far that was announced in the CSR, as there are also some proper concerns, one of which the hon. Member for Worsley and Eccles South (Barbara Keeley) rightly enumerated.

[Caroline Flint]

Part of the reason that the Opposition decided to use a whole day of Opposition time to debate this subject is that we think we should lobby and pressure the Government on it. I must ask the hon. Gentleman something. Would it not have been better if, instead of having the formula grant profile announced in the comprehensive spending review show a decrease next year of 10.7%, and then reductions of 6.4, 0.9 and 5.6% for the following three years, the Government could have spread the cuts evenly over that four-year period? They have created completely unnecessary mayhem and fear out there.

[Simon Hughes]

I say clearly to the right hon. Lady that, as I have indicated, I have argued publicly and privately that it would be better for the spending reduction to be spread more evenly. I have been into the Department to make that case. A parliamentary committee of Liberal Democrats from both Houses has collectively made that case, and it includes people who have been leaders of local councils. I understand and share the view that it would clearly be easier for local government to manage a gradual reduction than sudden and bigger reductions in the first two years, a small reduction in the third year and then an intermediate reduction. There is no disagreement on this issue between the right hon. Lady and me, and there is not much disagreement between councils of all colours around the country, which are making that point to the Government. I hope that the Government and Ministers in the Department for Communities and Local Government have been able to make some progress on that point, given that they obviously have to start with an announcement made by the Chancellor which reduces their flexibility—we will doubtless hear when the settlements are made.

[Joan Ruddock]

I do not know where the hon. Gentleman’s local authority lies in the indices of multiple deprivation, but mine is the 39th most deprived in the country. I say to him that there is a need for him to advise the Government on how to create fairness between boroughs such as ours and the Prime Minister’s local authority, which has been cited and is in the 5% least deprived areas in the whole country.

[Simon Hughes]

The right hon. Lady would expect me to be sympathetic to that point and I have acted in the past few weeks on that very issue. I have been in to see Ministers; I went to see the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell), and civil servants to discuss exactly that issue. I believe that it would be wrong if all the funding currently given to councils, including the working neighbourhoods fund, which was a top-up in order to assist deprived communities, was not taken into account as the starting point for the calculation for the next grant. I have also argued that it would be inappropriate for there to be a greater decrease in percentile terms for authorities such as hers and mine, which have significant deprivation, than for smaller authorities, just because we happen to have had a larger amount of public money before. I have been given reassurance that an upper and lower percentage reduction will be common across all local government—a band above and below which the reduction cannot happen—and that there is a likely inclusion of at least some, although I hope all, of the other funding, not just the core formula grant.

I understand the point that the right hon. Lady makes, and she would expect me to go into bat for deprived communities, because I represent a borough that has a higher deprivation index than the next-door borough of Lewisham—I believe that is the case. Relative deprivation is not a competition we are proud of, but this is something we have to deal with. Of course one of the things that we have to do is try to get a fair settlement that reflects the needs of and deprivation in all the local authorities in that settlement. Again, I can tell her that I have been doing the job that she, my constituents and my local authority, although it is run by Labour, would expect me to do, just as I would have done when my local authority was run by my colleagues.

[Mr Watts]

rose—

[Simon Hughes]

I will not give way, as the hon. Gentleman has intervened several times in this debate and I want to press on.

It is not just local government that is important; I want to pay tribute to councillors, of all parties, who serve in local government and to many extremely good officers in local government. It contains some brilliant officers, some less brilliant ones and, as in any walk of life, some people who may not be in their right vocation. Southwark council has some excellent officers, and I pay tribute to them and thank them for their courteous and regularly helpful service.

We know the background to today’s debate: we have to deal with a huge economic legacy of the combination of international problems, the banking crisis and the previous Government’s policies. We know that we have to save public money and we know that local government has to bear its share. I note that the Department for Communities and Local Government has imposed on itself a larger percentage reduction in its funding than it is asking local government to bear.

There will also be good things in the settlement, according to the comprehensive spending review. For example, it is clear that there will be additional money— £1 billion a year—for personal social services, in order to deal with the fact that there are more older people and people are living longer. That is a good thing. There will also be far fewer ring-fenced grants—90 will reduce to 10—and that is a good thing for most local councillors, who want to have that choice. In addition, a set of local community budgets will be trialled around the country. We should be positive about those good things.

The Government have to take two other things into account. The first is that some councils have much more reserve than others. The second is that some councils have the ability to raise much more money through council tax than others, because they serve much richer communities. Those background considerations are absolutely relevant.

[Mr Marsden]

On that specific point about revenue-raising ability, does the hon. Gentleman agree that this is why, regardless of philosophical arguments about dedicated streams, the severe attack on area-based grants for councils with significant areas of deprivation has been so devastating?

[Simon Hughes]

That is why a debate has taken place in which some of us have been trying to discuss a formula that is fair. Some bits of funding that are nothing to do with the local government funding settlement will still go to “affluent” and to “less affluent” areas. Such funding cannot be affected by it, which means that those areas will continue to get public money because it is protected in other ways.

I hope—I was going to say this at the end of my speech, but I will say it now—that one of the things that this Government can achieve, given that they are already a Government of two parties, is to work with the Labour party to try to get a more settled, agreed formula for distributing money to local government. Of course the cake size will vary, but the way in which it is divided between county and district council, and between unitary authorities, metropolitan boroughs and London boroughs, is always the subject of terrible struggle every year and has never been entirely satisfactory. This is neither coalition policy, nor Liberal Democrat policy, but I see no reason, given that we have set up an Office for Budget Responsibility to give independent advice, why we could not have an office that does that sort of job for local government and seeks to offer independent advice as to what the formulae should be. That would take that issue out of the inevitable political bartering, which does not, in the end, necessarily produce the right answer. This involves a terribly complex set of issues and I hope that we can find a better way of doing it.

I wish to make a final generic point and then say a couple of specific things relating to today’s agenda. I know that the Government have met and heard from the Local Government Association and London Councils, which are both cross-party bodies. I shall put on the record the LGA’s five considerations, which I share. I have dealt with one, which is the desire for a reduction, if possible, of the impact of front loading. My right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) has touched on another, which is the desire for an increase in capitalisation limits.

I raised that issue with Ministers the other day. The Government have set aside £200 million to pay for potential redundancy in local government. I understand exactly what the Secretary of State said, which was that we hope that many of the job losses will come through natural wastage and other things, not enforced redundancy. My noble Friend Lord Shipley managed well a reduction in staff when he was a council leader in Newcastle, working with the unions, in a way that mitigated all the worst consequences—that is how it should be done. There are good models for doing that, and they are very much supported by the TUC and its member unions. I have had good and authoritative reports that the real figure is much more like the one that the right hon. Member for Don Valley (Caroline Flint) and I have used and, thus, the total bill may be nearer £2 billion, or thereabouts, than £200 million—that clearly needs to be addressed. It is no good our thinking that local authorities can necessarily find the money that they will need if they are to reduce their staff costs.

[Sir Alan Beith]

It is perhaps worth reiterating that some authorities could meet a larger proportion of the redundancy requirement out of reserves and that others, through no fault of their own, are not in that position—I mention Northumberland as an example.

[Simon Hughes]

I remember—my right hon. Friend alluded to this fact—that the situation in Northumberland, which went through an enforced change in its local authority nature, boundaries and so on, was more difficult. Others are in difficult situations, too.

The LGA’s third point concerns accounting for what it calls “missing grants”. There is uncertainty about more than £1.1 billion of specific grants on which councils rely and where the Government have yet to announce future funding levels. I do not know whether the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), can tell us when he winds up whether those announcements can be made at the same time. The sooner they can be made the better.

The fourth point concerns fees and charges that are set centrally, such as licensing fees, which have often been shown to be inadequate in covering the full cost of the related services and I ask the Government to deal with that across Government. There are many sub-issues with fees and charges. I hope, for example, we stop the nonsense of having differential fees for burials depending on which side of a boundary one lives—[Interruption.] This is a serious point. People who happen to have moved across a boundary, having lived all their life in one authority, find they have to pay, say, 10 times as much to have their late husband or wife buried. Those things are offensive nonsense and we need to deal with them.

The last point is that we need fair grant distribution. That is where I make the strongest plea, alongside the right hon. Member for Don Valley. We must ensure that all the funds that have come from Government to local government this year are the starting point for the calculation for the next year. I have been reassured that things are moving in that direction and I want them to move completely in that direction over the next few days.

London Councils makes similar points. Southwark, like Lewisham, is a borough that has had the protection of a floor and cap, as many authorities have had to. Southwark, like London Councils, argues that funding floors should be set at the highest possible level to prevent cuts falling disproportionately on the local authorities with the highest need. That is important. Those points have been made, by and large but not exclusively, by authorities that are not Conservative-run, but authorities run by the Tories are in that boat, too, as well as authorities where there is a joint administration.

Let me make a final couple of points. Also included should be any other local authority funding that has been cut, if for understandable reasons. For example, in Southwark there was the Aylesbury private finance initiative for our largest estate, which was due to be rebuilt. Because that work had not started, the Government have said that they cannot advance the money. I understand that argument, but it needs to be taken into account as part of the picture. I make a specific plea on that point.

I am conscious that the Government will go down the road of returning business rate control to local government. That is a good thing. I am very conscious that in the localism Bill, which I think is coming into the public domain this week, the Government will give much more discretion to local government on how it raises and spends its money. That is a very good thing. I have always argued that the Department that looks after local government should stand up to the Treasury so that local councils can have the power of general competence, including total general financial competence. For example, they can then borrow against their asset base—their housing stock in the case of Southwark—without having to go to the Government cap in hand to get permission. The Treasury’s hand has been unnecessarily authoritative. I understand why, but in any other parts of the world local council spend does not count in the same way and in the same accountancy column towards public sector borrowing requirement totals.

I have a couple of messages to give local councils through the Government. Again, I shall reflect some things that have already been said. Councils must be careful not to pick on the voluntary sector when times are hard for them. It is easy to do that. It is easy suddenly to decide to take all or the bulk of the money away from organisations that are not in-house. Sometimes, councils must reduce their own management and costs. That might be a more effective way of dealing with reductions than taking money away from the voluntary sector, where local authority funding contributes towards a larger whole. I hope that there will not be any such abuse of the relationship. Voluntary sector organisations are often valuable partners and they need to be given as much support and encouragement as possible.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I agree with the hon. Gentleman, but does he not think that that is the basis of the debate? If the cuts are early and quick—if they have to be decided in three months—people will go for the easy options rather than the restructuring, because the restructuring will take longer to come into effect. Cutting a voluntary sector budget is almost immediate.

[Simon Hughes]

I will not dissent from that. I am trying to act in a spirit of consensus and I hope that we will be careful. To put it bluntly, there are both good and poor voluntary sector organisations and although I am not saying that they should not have their grants checked and revisited regularly, the good ones need protection. There is sometimes scope for rationalisation in the voluntary sector. In Southwark, the three pensioners’ organisations are becoming one. That should have happened a long time ago—I argued for it—and it will make them a stronger body. I also make a plea that non-statutory youth services should be particularly protected. Colleagues on both sides of the House have argued for that.

Local government must get the message that it should not be paying anybody more than the Prime Minister. It is very simple. Salaries have been ridiculous and unjustified. It has been everybody, and it is not the fault of a council of any particular colour. They have been following each other into this competitive game. To put it bluntly, nobody in the public sector needs to earn more than about £150,000 a year. I am sorry, but I have a really hard-line view about this. We need to start to scale down the ridiculous salaries. If the public sector behaved properly, perhaps we would have some morality in going to the private sector to say that it should not pay such ridiculous salaries either.

Times might be hard, but I ask local government please not to sell off the family silver, which it might live to regret. I am having a local spat with my local council leader because Southwark council has decided that it wants to sell off the three historic metropolitan borough town halls. That is unnecessary. The buildings could be reconfigured and kept in use and they would be far better places and venues that would be far more valuable than the alternatives that have been mentioned.

I have followed the example of the hon. Member for Blackpool South (Mr Marsden) in being positive about trying to find a way of doing things much better in the future. We need common agreement on how to decide the formula. I hope that we will minimise redundancies in all cases, because nobody wants any more redundancies than there should be. I hope that when we get the settlement—probably next week—there will be the maximum collaboration between the major parties to try to ensure that where there is still unfairness, we seek to persuade the Government to make adjustments between the provisional settlement and the final settlement so that the latter is better. This will not be an easy time for local government—no one is pretending that—but I hope that today’s debate will mitigate that and that we can all encourage Ministers in the Department to ensure that they win as far as possible every remaining battle they have to fight with the Treasury.

18:09

[Steve Rotheram (Liverpool, Walton) (Lab)]

I am delighted to have been given the opportunity to speak in this important debate as, once again, yet another announcement —this time on local government funding—will see areas such as Liverpool lose out in favour of more affluent areas of the country. I have no doubt that some Tories on the Government Benches would agree with the rich getting richer—after all, it is part of their political philosophy—but they could at least come clean about it and not try to kid us that this makes things fairer.

[Andrew Percy]

Will the hon. Gentleman give way?

[Steve Rotheram]

Not just yet.

To hear the Secretary of State tell one of my hon. Friends not to take us back to the ’80s shows the brass neck of the man. That is exactly what Labour Members wish to stop. If he wants to know about that torrid decade of Tory rule, I would be happy to sit down with him for a few days to outline the devastation that the Tories wreaked on our great city and specifically on the people of Liverpool, Walton.

This decision on local government funding by this coalition Government will have a disproportionate effect on the area I represent. When I made my maiden speech, I warned—hon. Members can check Hansard—that I would fight against a return to the devastating Tory policies of the ’80s that nearly destroyed places such as Liverpool. That is a fight that I will not shy away from.

The Government are rapidly gaining a reputation for saying one thing and doing another, and I fear that their gung-ho approach to local government funding is yet another shameful example of the widening gulf between the coalition’s rhetoric and the harsh contradictory reality on the ground.

[Gavin Barwell]

The hon. Gentleman is making a powerful case against funding being cut in deprived areas and the money going to affluent areas. If I told him that, according to the Library, Liverpool, like my authority, had one of the lowest increases of the past five years—a 3% cut from the Labour Government—and that the biggest increase went to Rutland, which got a 25% increase, what would he say about the Labour Government’s record over the past five years?

[Steve Rotheram]

I would say that it is not just about one specific funding stream; it is about an overall package. Liverpool benefited greatly under the Labour Government —so much so that the hon. Gentleman’s friends on the Liberal Democrat Front Benches used to say that the Lib-Dem controlled Liverpool city council was a flagship council because it had got so much money from the Labour Government. Don’t try to give me lessons about what happened in Liverpool, mate!

In June, the Department for Communities and Local Government wrote about the immediate front-loaded and ongoing savings to be made by local authorities that

“the Government is satisfied that it has adopted a fair approach to making the necessary reductions.”

In the comprehensive spending review, the coalition promised to

“limit as far as possible the impact of reductions…on the most vulnerable in society, and on those regions…dependent on the public sector”.

The Government never tire of reminding us that we are all in this together, in the new age of austerity, and insist that their belt-tightening is fair and progressive. So much for the rhetoric. The reality is that the proposed one-size-fits-all local government finance settlement, with its removal of ring-fenced funding for poorer regions and its top-slicing of the formula grant, is set to hit the poorest councils the hardest—none more so, unfortunately, than Liverpool city council.

Whether the Secretary of State likes SIGOMA or not—he did question its findings—its research shows that of the 20 worst-hit local authorities financially, all but two are in the top 20% of most deprived areas in the country. Conversely, of the 20 councils that do best out of the comprehensive spending review, all but two are in the top 10% of wealthiest local authorities. The SIGOMA report concluded:

“The current finance settlement perpetuates inequality rather than allowing areas to operate on an equal footing.”

SIGOMA is not alone in its findings. Following its own analysis, the TUC has affirmed that the Government’s budgetary policy

“will risk the recovery, increase inequality and threaten social cohesion”.

[Tom Blenkinsop]

Some interesting facts came out today from the construction industry. The Construction Products Association said that it was going to slip back into recession and the Engineering Employers Federation said that it would not be able to pick up the slack from public sector cuts as the Government have said it would.

[Steve Rotheram]

I thank my hon. Friend for those comments. Having been a bricklayer and an apprentice, I know the construction sector all too well. I once described myself as the only bricklayer in Parliament; unfortunately, one of my colleagues, who is not present, also did an apprenticeship but he was not indentured, so I can still legitimately claim to be the only indentured bricklayer in the House of Commons.

In addition to the statistics I have quoted and the bodies I have mentioned, the Centre for Local Economic Strategies has noted that the areas most at risk are those with relatively few private sector jobs, high levels of unemployment, poor transport links and high vulnerability to national public sector job losses.

[Brandon Lewis]

The hon. Member for Blackpool South (Mr Marsden) made some comments about coastal towns, and my constituency fits that bill. When Labour came to power, Great Yarmouth had a couple of the most deprived wards in the country and they were still in the handful of most deprived wards when it left power. Surely the hon. Member for Liverpool, Walton (Steve Rotheram) must agree that it is time to try something different.

[Steve Rotheram]

I would love to ask the people of Great Yarmouth whether they would like some money with strings or no money at all. I think they would rather have money with strings than what you are proposing—cuts across the board. [Interruption.] That is about local authority spending, not how much money you get. You cannot have it both ways.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. If the hon. Member for Great Yarmouth (Brandon Lewis) wants to make a further intervention, he should stand and do so, not shout a conversation across the Floor of the House.

[Steve Rotheram]

I apologise, too, Madam Deputy Speaker. I am quite passionate about this. I do not normally just stand up and say things in the Chamber; I stand up when what you are trying to do affects the area that I represent. Believe me, this is one of the areas where we are going to be most affected.

Expert analysts up and down the country agree that the evidence is overwhelming that the rich will get richer and the poor will get poorer—so much for progressive politics. This might be far too grave and pressing an issue to exploit for party political reasons, but I cannot help but notice the findings of the House’s own researchers that

“the average proportion of grants cut is lower for Conservative controlled authorities than the average for authorities controlled by other parties.”

Tory-led West Oxfordshire district council, which is in the Prime Minister’s constituency and is one of the least deprived in the country, can look forward to a budget increase of up to 37% over the four-year spending review period, while Labour-run Liverpool city council is set to lose—[Interruption.] I would love you to come to Liverpool and laugh in the faces of those people who are going to be forced—

[Madam Deputy Speaker]

Order. The Minister knows better: if he wants to make an intervention he can do so. Let me say to the hon. Member for Liverpool, Walton (Steve Rotheram) that although he feels very passionately about this issue, he must direct his comments to me in the Chair, preferably not blaming me for the Government’s policies—or the Opposition’s for that matter. He should not respond to any points unless they are made by way of an intervention.

[Steve Rotheram]

Thank you, Madam Deputy Speaker.

The Labour-run Liverpool city council is set to lose up to 38% of its funding. Clearly, some of us are more “in this together” than others. I mention Liverpool, as I always try to, because it is the very reason I am here in the first place. Let me focus briefly on precisely what the new funding regime means for my neck of the woods. I should point out that the very nature, speed and extent of the cuts represent a double whammy for Merseyside, which is home to two of the most deprived councils in the country—Liverpool and Knowsley. Indeed, Liverpool is the most deprived local authority area in the land according to all the key poverty indicators, despite the transformation of our city into a true international destination of choice.

[Robert Neill]

I understand the hon. Gentleman’s concern for his native city, but has he seen the local government finance settlement? No one else in the House has.

[Steve Rotheram]

No, I have not, but if the Minister can tell me that Liverpool will not suffer disproportionate cuts, I will allow him to come back in.

[Robert Neill]

As the hon. Gentleman has not seen the figures and therefore cannot know what they are for any authority, does he think it right to speculate and scare people when he has no evidence on which to base his assertions?

[Steve Rotheram]

I am more than happy to give way to the Minister if he can allay the fears of people in Liverpool, Walton. Can he tell them that what I am saying is not true and that Liverpool’s funding will not be disproportionately cut? I did not think so.

[Robert Neill]

Will the hon. Gentleman wait for the settlement and perhaps look at this then?

[Steve Rotheram]

What we are doing is preparing for the worst cuts for generations in areas such as Liverpool.

[George Hollingbery]

Will the hon. Gentleman give way?

[Steve Rotheram]

I have already allowed enough interventions, as hon. Members must admit.

[Mr Watts]

Does my hon. Friend think that the confusion about the likely size of the cuts is because the spending review that was publicised is the document that everyone is working from? If there is a problem with it, it is because the Government have done the figures wrong.

[Steve Rotheram]

I thank my hon. Friend. In the spending review framework, the Government committed themselves to limiting the impact of reductions on areas heavily dependent on the public sector. To meet their stated commitment to fairness, should not the Government apply the same logic to the local government settlement? I will give way if the Minister wants to answer that.

I was speaking about the Tory-led West Oxfordshire district council in the Prime Minister’s Witney constituency, one of the least deprived areas, and about Liverpool, the most deprived local authority area, getting a 38% funding cut. I mention Liverpool, as I always do, and Knowsley. As an aside, both the Labour party and the Lib Dems have had their conferences in Liverpool. I ask the Tories to do the same so that they can see our wonderful city for themselves. Maybe then they would be less likely to destroy all the progress that we have made in the past few years.

[George Hollingbery]

I have huge admiration for the passion with which the hon. Gentleman defends his constituency. I freely admit that I have little idea how the cuts will impact on Liverpool. However, he probably has as little idea how they will impact on places such as Hampshire, which outwardly may appear to be leafy, rural and wealthy, but Hampshire has suffered a loss of £45 million of formula grant since 2003-04, and expects to lose another £20 million over the next few years. Furthermore—

[Madam Deputy Speaker]

Order. Not “Furthermore”; it is an intervention. The hon. Gentleman can make a speech in a moment.

[Steve Rotheram]

I shall be interested to see whether the hon. Gentleman will allow me to intervene, as I have allowed him to do.

Liverpool city council has established that the in-year cuts announced by the Government in May will have a more than £20 million impact in its ongoing annual reductions. Almost half of this will come from the 2010-11 area-based grant programme, the very programme designed to support deprived communities according to their needs. Funding for a programme to reduce health inequalities by reducing smoking will be cut by 48%. The local enterprise growth initiative, which the hon. Member for Bermondsey and Old Southwark (Simon Hughes) spoke about, focuses on increasing entrepreneurial activity. It will lose 14% of its moneys.

The transitional employment programme, which supports the long-term unemployed back into employability and employment, will see a 13% cut in its funding. The working neighbourhood fund, which has been mentioned by other speakers, was introduced under the previous Government to tackle worklessness in deprived areas. It has been done away with altogether, depriving the city of £3.5 million this year alone; and another £3.5 million of cuts have been made in area-based grants which directly affect children and young people.

The Government have been consistently slick in their assurances that the delivery of key services need not be adversely impacted, that the vulnerable will be protected, and that the Government are serious about job creation, tackling the skills deficit and getting people back to work. That is starting to sound like a load of old guff.

[Simon Hughes]

The hon. Gentleman’s city, Liverpool, is a fantastic city. Whatever our differences, our two parties have run it over the years and they have both contributed to it being the great city that it is. I am not speaking for the Government, but I know that they are keen to try to pull together all the effects of spending changes from all Departments as they affect a city or a region, so that none ends up with an unfair or unnecessarily severe burden. That is a tall order. It has never been done before, but the Government are trying to do it, and I hope that people such as the hon. Gentleman and I will work together with the Government to ensure a fairer spread of funding decisions across the—

[Madam Deputy Speaker]

Order. The hon. Gentleman knows that interventions should be brief. It is not his role to mediate—not in the Chamber, at any rate.

[Steve Rotheram]

What a shame that the hon. Member for Bermondsey and Old Southwark is not speaking on behalf of the Government and in a more elevated position. If he were, the concerns that he highlights would be brought to the attention of those making the decisions.

Following extensive research and analysis of the impact on Liverpool of the unfair distribution regime, the TUC summed up its findings as follows:

“Experience on the ground suggests that even at this early stage of spending cuts it is simply not possible to make such steep reductions in spending, without hitting the worst off. The impact of cuts in the area based grant also shows that spending reductions so far have been about far more than reducing waste—front line services have been affected.”

I seriously begin to question at best the competence, and at worst the integrity, of the present Administration when programmes, services and initiatives which clearly contribute to the declared aspirations of the Government are held in such contempt.

I have not even touched on huge job losses, with the compounding impact of central Government cuts, or the longer-term prognosis, and there is much more that I would like to say, but I have been told by somebody not too far away that my time is almost up. I am desperately hoping to prevent the disproportionate effect on the area that I represent. I finish with a plea to the Government ahead of their local government finance settlement.

My hon. Friend the Member for St Helens North (Mr Watts) tabled early-day motion 1088. In it, he succinctly outlines issues of particular concern affecting less affluent areas of the country, makes sensible and reasonable recommendations, and calls on the Government to take serious heed of the incontrovertible facts and to deliver on their promise to ensure fairness. It is future generations that will reap the social consequences of the Government’s unfair and pernicious policies, so I urge coalition Ministers to study carefully the points that my hon. Friend and many other right-thinking Members have made, and to think again before careering headlong into a finance settlement that will prove punitive, self-defeating and irrevocably damaging to those who need and deserve that the least.

18:29

[George Hollingbery (Meon Valley) (Con)]

I pay tribute to the hon. Member for Liverpool, Walton (Steve Rotheram), who spoke with real passion for the area he represents. None of us would expect anything less of hon. Members than to defend the areas that they represent. However, there is no doubt that some cuts had to be instituted, as those on the Opposition Front Bench admitted. There would have had to be cuts, whoever was in control.

In the comprehensive spending review, my right hon. Friend the Chancellor outlined a programme of cuts and spending changes that would allow us to put the country back on a firm footing, among which were changes to local government funding. I know that my saying this is likely to arouse groans from the Opposition Benches, but there is no doubt that, as the Secretary of State pointed out earlier, if changes are to be made to the amounts paid to local government, the period in which they are granted and the amounts in each period, Opposition Front Benchers will have to identify areas elsewhere in Government they would cut. It is no good saying that there are no consequences; there plainly are.

Government Members could talk eloquently about closing hospitals and about body armour for soldiers. I shall not use that ploy, but something will have to give somewhere if we change the numbers for local government.

I shall address one or two of the points made in the document from SIGOMA. I entirely understand why an organisation of local authorities should get together to try to defend their position. Clearly, that is the right and proper role of local authorities in the current circumstances, but one of the points made in the document is about the imposition of floors. I think I am right in saying that the right hon. Member for Greenwich and Woolwich (Mr Raynsford), the former Local Government Minister, was responsible in 2002-03 for the imposition of the floors, which protected some local authorities from huge reductions in local government spending as a result of the formula having changed enormously. The floors have remained until the present day, so any disparity or inequality that might be felt across local government has been entrenched by that rule, which resulted from enormously complicated changes in local government funding rules. It is therefore very difficult at this stage to imagine that in one fell swoop we on the coalition Benches will even out the inequalities created over the past 10 years.

It is reasonable to question the funding formula itself. It has changed a great many times, as hon. Members will know, resulting in enormous confusion across many local authorities and, in my part of the world in particular, a real reduction in funding over a great many years. I have already mentioned some of these examples in the House, but East Hampshire district council saw a real-terms funding reduction of 25% from 2001 to 2010, while Havant borough council saw a 13% real-terms reduction. Havant council has almost no assets. It is not a Wandsworth or a Westminster, with a huge parking income or buildings it can rent out to third parties; it is a straightforward council that takes in council tax and receives grant from the Government, yet its funding has been reduced by 13%.

[Barbara Keeley]

Would the hon. Gentleman like to inform the House what the balance is between the formula grant and the council tax base for those councils? That is one of the big disparities, and it is not helpful to talk just about the formula grant, because many councils in places such as Surrey and Hampshire have a good, substantial council tax base.

[George Hollingbery]

I absolutely understand what the hon. Lady is saying. If I remember rightly, the SIGOMA report includes a table—I think on page 4 —of the differential rates of council tax between authorities. I cannot tell her exactly what the numbers are, but the overall band D council tax charged in East Hampshire, taking in the Hampshire county council precept and the local parish precepts, is higher than in the SIGOMA authorities. There is already a disparity in the amount that local citizens pay in my part of the world towards the funding of their councils, which is taken into account in the grant settlement, as I understand it. As I mentioned in my earlier intervention—I apologise again for making it overly long, Madam Deputy Speaker—the amount for Hampshire county council reduced by £45 million between 2003-04 and this year, and it is expected to reduce by a further £20 million over the next several years.

Those are not the only sources of funding for local government—there is the business rate and council tax. The UK Statistics Authority says that 56% of local council revenues comes from the council grant. If we apply the cut that the Government propose to that 56% and look at the totality of what local government takes in, we find that the cuts amount to about 14%, or 3.3% a year. The Government have been brave and transparent in talking about the totality of cuts to the revenue grant allocations, because the cut across local government is rather less.

Furthermore, an article in the Municipal Journal from 4 November last year said that studies of Total Place had suggested that only 5% of all spending in a local area comes through democratically accountable bodies, which leaves 95% to come from central Government—funding that can continue to be spent without the cuts applying, even though there may be cuts elsewhere. Therefore, a lot of the talk that we have heard—about fire and brimstone, a cleansing across local government, and local businesses going out of business because there is no longer any money—needs to be taken in that context. Plainly, a great deal of Government money is still spent locally.

One or two points have been made about the Government not doing anything to help local businesses. Indeed, the converse point—that the cuts will have a disproportionate impact on areas with high local government employment—has also been made. The Secretary of State did not mention it, but the Chancellor has provided for national insurance contributions holidays, which are granted to small business formations and are specifically targeted on areas with high levels of employment in local government—or, indeed, in government across the board. The Government have therefore taken into account the fact that, although there will be cuts in local government, new business formation will be important. Much as many of my colleagues in the south-east would like the NIC holiday to come to the south-east, we have at least some understanding of why it is not.

I do not for a moment misunderstand the fact that anybody who loses their job faces a difficult time, particularly in the current conditions. Therefore, I take seriously the loss of employment in local government. However, it is also worth pointing out—to use the cliché—that when it comes to innovation, necessity is the mother of invention. De-ring-fencing has allowed local councils a world of flexibility to find new ways of doing things: to work differently with partners, and to take budgets that were predicated on particular activities occurring in a certain way and use them differently.

Various representations have been made to the Select Committee on Communities and Local Government, from people across the country and across many subjects, but I was particularly struck by one contribution—I think it was about Birmingham; it could have been about Manchester. [Interruption.] Opposition Members will have to forgive me—we have had many representations. Some 15 or 20 agencies were offering similar services to the local population. If we have such duplication of services in local councils—and I believe that in some of the large metropolitan boroughs we do—there are surely innovations to be made. There is money to be saved, and there are new, different ways of doing things. I commend that to local councils.

[Andrew Bingham]

For the past two or three years, the council in my constituency has shared a chief executive with Staffordshire Moorlands council, which is not only in a different county but in a different region. The councils now have a shared management team and shared services, which shows the innovative ways in which local authorities can save money and preserve local services for residents.

[George Hollingbery]

Indeed, and I will return to a couple of examples of my own in a moment.

There is a real need for local councils to work much more closely with third sector organisations in their areas. The hon. Member for Bermondsey and Old Southwark (Simon Hughes) has already made the point that we must not encourage councils to take the easy way out, which is to save money by cutting direct grants to local charities.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I hear what the hon. Gentleman says about reinventing local government and finding new ways of doing things. I am still a local councillor, and I agree with him, but does he agree that front-loading the cuts when we still do not have the local government settlement, but when we have had the CSR, will make it harder to do those things? Councils will have less time and will have to go for easier, quicker cuts to balance the books.

[George Hollingbery]

Indeed. It is difficult to make plans at this late stage, but we have known about the cuts for some considerable time. Most councils have known for at least two or three years that the economic times are difficult. My local councils have been planning for such changes for two or three years. Frankly, it is no great excuse to say at this stage that we do not yet know the level of the settlement. We all know—and we have known for a long time—that it will be difficult.

[Gavin Barwell]

Did not the previous Government’s 2009 pre-Budget report set out clearly that public expenditure in unprotected Departments was going to fall by 25% over the course of this Parliament? Given that local government was not one of those protected areas, any local authority would therefore have been aware that such reductions were coming, whoever was in power.

[George Hollingbery]

My hon. Friend clearly demonstrates that there is no real excuse for local authorities pretending that we cannot do anything because we do not know how big the cuts will be. Straightforwardly, we know that there will be cuts, and we know that they will be serious.

There are any number of innovative third-sector partners out there doing a fantastic job. I would like to pick just one example from my local area—although it works out of the constituency of the Financial Secretary to the Treasury, my hon. Friend the Member for Fareham (Mr Hoban)—which is the You Trust. I recently met Nicola Youern, who runs the trust. The You Trust has a fantastic way of dealing with new cases, which Hampshire county council brings to it, of difficult-to-house young people. The trust first asks, “What can we teach you to do for yourself?” and then asks, “What can we teach your relatives and friends to do for you that will stop us having to intervene?” The trust goes through that sequence of trying to help people, before saying finally, “The only way we can deal with this is through a public sector intervention.” If there were more of that thinking across the public sector, we would get better results for less money.

I also welcome one or two changes that I think—I hope—will shortly appear in the localism Bill. The reporting changes are clearly very welcome. As the performance management portfolio holder for Winchester city council until recently, I was in charge of producing the statistics that we had to relay to central Government, almost none of which was used to create real change in the council but almost all of which were incredibly burdensome to collect.

[Justin Tomlinson]

Does my hon. Friend agree that the statistics rarely, if ever, matched what local residents said on the doorstep?

[George Hollingbery]

Indeed. My favourite was on the time taken to re-let a council house, whereby the better we did in re-letting a difficult-to-let council property the worse the statistic became, because of the longer average period for which we had not re-let the house. Every time we re-let a house that had been on the books for three years because it was in a poor condition, the worse our statistic became.

The work also involved a huge amount of management time. We had specialist employees dealing with just that issue and a specialist computer system just to monitor performance management, so I very much welcome rowing back the amount of information that local councils will have to report to central Government. I also became extraordinarily fed up with the number of strategies that we had to deal with, and I would very much welcome an assurance from the Minister that we will not have to do anything like as many of those, either.

I remember fondly the black and minority ethnic strategy for Winchester city council, an entirely necessary document.

[Tom Blenkinsop]

I hear the hon. Gentleman’s comments about reporting by local authorities, so does he have any worries about the £500 rule, whereby anything on which a local authority spends more than £500 will have to be documented?

[George Hollingbery]

The accounts departments already record most of that information, so I see no great difficulty in councils reporting it more widely. It is already on the books, on computers and there to be reported.

[Tom Blenkinsop]

Will the hon. Gentleman give way?

[George Hollingbery]

If I may, I will carry on.

Strategies were piling up and gathering dust on shelves, but the black and minority ethnic strategy at Winchester city council was, I agree, entirely necessary in small amounts. We, like anybody else, had to be held to account for what we did in that area, but, despite only 1.5% of our population having that background, we were forced to put £50,000 into employing consultants, who produced an enormous great report telling us that what we did already was okay. That is the sort of imposition by central Government to which I hope the localism and decentralisation Bill will put an end.

The wretched Standards Board for England has also accorded a vast amount of work to local government, especially to its legal employees. The board has been used as nothing more than an excuse for the petty battering of officials and parish councillors throughout the country.

We can do more imaginative work in-house, as was said a moment ago. Winchester city, East Hampshire district and Havant borough councils now have a choice-based letting arrangement. That comment has been noted by Opposition Members, but I am sure that such schemes exist in many parts of the country. The arrangement has saved our councils an enormous amount, and we have achieved a better result for our clients. East Hampshire district and Havant borough councils share a joint management tier, and the same individuals hold all the senior management roles in the two authorities: there is one team for two different councils.

Hampshire county council now sends less waste to landfill than any other council in the country, and—furthermore—it generates power for 50,000 homes by incinerating the remainder. Hampshire built itself a new headquarters entirely without cost to the public purse, managed to halve its carbon footprint and is selling other Winchester office blocks that are redundant to its needs. It recently invested with the NHS in 10 state-of-the-art nursing homes, so it is no longer fined millions of pounds for being held responsible for bed blocking—another innovation whereby the council invested to save money. On top of all that, it has made £48 million in efficiency savings—I emphasise, real efficiency savings that can be counted—over the past two years.

I leave my final words to Simon Eden, chief executive of Winchester city council, who says that

“our approach in all this has been to avoid salami-slicing, and instead…re-design services, taking into account changes…made to performance reporting and inspection, planning and in other areas. We have also used that process to look at the best way of focusing on delivery of key priorities for the district, cutting out that which might be seen as lower priority.”

I commend that approach to all local councils and hope very much that the House rejects the motion.

18:54

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

I am grateful for the opportunity to speak in this important debate, and it is good to follow a well reasoned contribution from the hon. Member for Meon Valley (George Hollingbery), in which he made a number of interesting efficiency suggestions. All local authorities throughout the country need to think about the efficiencies that they can fairly and equitably make, but this debate is not about whether local authorities need to make them. It is about the way in which the funding settlement will be distributed throughout the country, and the unfair way in which it will impact on some of the most needy areas in the country.

It is unfortunate that we remain in the dark at this late stage of the funding cycle. The Minister complains that people are speculating about the final outcome, but this debate is his opportunity to tell us definitively what will happen and to reassure the House that the scenarios that the special interest group of municipal authorities, among others, has modelled will not come to pass. I am afraid, however, that in the absence of any hard answers from the Ministers, SIGOMA’s analysis is a good one that will continue to gain a great deal of currency.

[Barbara Keeley]

Was my hon. Friend as surprised as I was to hear that the hon. Member for Bermondsey and Old Southwark (Simon Hughes) seems to have received from the Government reassurances that have been denied to the rest of us? I wonder whether the Minister is prepared to share the reassurances that he has given to that Member with other Members.

[John Woodcock]

Members from all parts of the House will have noticed that, and the Minister has an opportunity now or later in his winding-up speech to share that information.

The hon. Member for Bermondsey and Old Southwark (Simon Hughes), who resumes his seat as I speak, gave an eloquent speech in which he took issue with a number of his Government’s key policies, but he fell into the trap that even the Secretary of State has fallen into. The hon. Gentleman said, “Wouldn’t it be outrageous if any local council were to cut the budget of the voluntary sector to try and balance the books?” I say to him and the Minister, however, that local authorities are looking at the dire situation they face and the appalling decisions they have to make, and from the feedback, I have they do not welcome Ministers telling them what they ought not to do.

[Christopher Pincher]

The hon. Gentleman says that local authorities are worried. Perhaps Barrow and Furness is worried, but a cabinet member on the borough council in Tamworth, which is not a rich place or wealthy borough, says:

“We have been planning for a long time to cope with the spending round. The previous government gave with one hand and then took twice as much back with the other. So local government is accustomed to saving money. I am confident the councils services will grow despite reduction in grants, partly thanks to the new homes onus, removal of ring fenced budgets and less red tape. It is a careful balancing act but not one that will lead to massive service cuts. It is business as usual in Tamworth.”

If it is business as usual in Tamworth, why not in Barrow and Furness—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Interventions are supposed to be short—I have said that a number of times—and if the hon. Gentleman reads a very long quotation on to the record he is going to tend to get cut off before he makes his final point.

[John Woodcock]

I was getting worried, but thankfully there was a question in the last six words of that diatribe. Of course, as hon. Members would expect, I shall go on to talk about the particular difficulties that Barrow borough council will face in the months and years ahead. No one is suggesting that pain will not be felt right across the country. I have to say to the hon. Gentleman that, although every council knew that we were approaching difficult times for continued funding, local authorities have not been given enough time to plan for the front-loaded cut that it seems will be imposed on them. Such an approach will cut into areas that it would not have been necessary to cut if the process had been more spread out.

[Bill Esterson (Sefton Central) (Lab)]

On front loading, Sefton council is facing £38 million of cuts in year one, which will decrease to £16.7 million in year two and £3.8 million in year three. It has been a hung council for 24 years and local councillors of all parties are used to working closely together and resolving such problems. However, they are now finding it incredibly difficult to do so. I hope that the Secretary of State will take on board the challenges that such councils are facing as a result of front-loading.

[John Woodcock]

My hon. Friend makes a very good point. His remarks illustrate that, with the top slicing of the formula grant and if the cuts are front-loaded—the Minister is welcome to make the announcement about that today and end the speculation—it will pretty much guarantee that the most deprived areas of the country, which most rely on extra support, will bear the greatest burden of the cuts.

[Simon Hughes]

On the voluntary sector grant, if the hon. Gentleman looks at the record, he will see that I did not say that such a situation would be outrageous. I was simply asking councils to be careful not to turn all the heat on to the voluntary sector, rather than looking first at themselves.

[John Woodcock]

The hon. Gentleman is quite right. I was actually paraphrasing the Secretary of State, who I believe said that local authorities would rue the day that they cut voluntary sector grants. I am sure that they will be delighted to hear how they should be balancing their books, given that the cuts are being front loaded so that a great proportion will fall in the next year.

According to the SIGOMA model, Barrow borough council, which covers the majority of my constituency, will receive a proportional cut in funding in the next financial year that will be exceeded by the cut in funding to only two other local authorities. Despite being in the top 30 most deprived council areas, according to the 2007 indices of multiple deprivation—and if the modelling is even close to accurate— Barrow borough council can expect to lose around 20% or up to 25% of its central Government funding next year. Relatively wealthier local authorities will have levels of cuts imposed that are far less than those that might be inflicted on Barrow borough council.

Although this is an Opposition day debate and many Labour Members have spoken with great passion about the huge damage that could be wrought on their constituencies, Government Members should be clear that this is not simply a partisan issue. Councillors from all parties are concerned about the potential cuts. I hope that the Minister is aware of a letter from the Conservative leader of Barrow borough council—perhaps he will confirm whether he has received it—who I think has written to him or to the Secretary of State to express his concern at the disproportionate cuts that will hit Barrow severely if what is proposed is followed through next week.

[Tom Blenkinsop]

Conservative leaders in Barrow and in Stockton and an independent mayor in Middlesbrough all say that these cuts are disproportionately hurting the north compared with the south. Does my hon. Friend think that the Secretary of State would consider those people to be the cigar-chomping communists that he talked about in a recent article in Total Politics magazine?

[John Woodcock]

I am not sure who the Secretary of State would consider to be a cigar-smoking communist. However, my hon. Friend makes a good point. It is not solely Labour councillors or Labour MPs who are speaking up about this matter and it is not just the north of England saying to the south of England that the present funding arrangements need to continue. We are making the case for the broad approach taken by the previous Labour Government. They recognised that areas where deprivation, poverty, unemployment or economic isolation are entrenched need extra resources to improve their situation and to grow the private sector in a way that all hon. Members want to see.

Geographical isolation has always posed economic challenges for the area of Cumbria that I represent. That is never more so than in periods of recession or limited growth. Savage cuts in funding to the local authority at such a time can only exacerbate those challenges. A vicious cycle will be created because not only will jobs directly provided by the borough council disappear—taking with them the multiplier effect that they have within the local economy—but the prospect for investment that will attract new jobs and businesses to the area will also go. Over the past decade, local authority funding has worked well in partnership with funding from the regional development agency to stimulate growth in the Furness area. The situation has not been perfect and we have wanted some things to be more efficient. However, there has undoubtedly been a balance positive over the past 10 years, and there are grave concerns about that being cut.

The people of Barrow are watching anxiously. The Government have imposed added uncertainty on the region through their delay of the vote on the Trident replacement project, which will sustain many thousands of jobs in Barrow’s shipyard for decades to come. Such a severe cut to funding will strike a real blow to economic confidence in the area.

However, this is not simply about Barrow or any one area. The matter is also about more than swingeing cuts to local government funding on its own; it is about whether we make the ideological leap into a funding model and into a public policy world where the funding of local areas is blind to the real needs within those areas. Such a simplistic approach may be superficially attractive to some coalition Members, but they must know that the reality will be neither fair nor progressive. Such cuts will mean that the poorest areas of the country carry the greatest burden of cuts, while wealthier areas escape relatively unscathed.

There is still time for the Government to rethink such an approach. It cuts adrift the most economically vulnerable areas of Britain—Barrow is counted as one such area. These cuts would not only jeopardise economic growth in Barrow, but could lead to a situation where any recovery is geographically lopsided and passes by many of the most deprived areas of the country. If the Government want to prevent a situation in which one sector or one region overheats economically, they must think again on this.

I hope that they will listen to the strong calls that have been made in this House and by councillors of all parties across the country to think again about the settlement that they are about to impose—to think about its level, the way in which it is being front-loaded, and the fact that it seems disproportionately to hit some of the areas which, at this difficult time for the country, need our support the most.

19:10

[Andrew Percy (Brigg and Goole) (Con)]

I am glad to have caught your eye, Madam Deputy Speaker, so that I can contribute to this important debate. There have been many interesting contributions, on both sides of the House, in which Members have put the case for their particular councils and areas with some passion.

Before I came to this House, I served for 10 years as a city councillor. In fact, I was exactly one half of our group on the council—I doubled its size when I arrived. However, our lack of electoral success does not mean that we were not involved closely in running the local authority. Our council was originally run by Labour and then eventually became one with no overall control, so we were heavily involved in running it for several years.

We have heard some very thoughtful speeches today, particularly from the hon. Member for Bermondsey and Old Southwark (Simon Hughes), who made some sensible and interesting points. In relation to burials, I can certainly relate to the issue that he raised about people on different sides of the same street, in some cases, paying different amounts. Anything that the Government can do to alleviate that would be greatly appreciated.

However, some of the speeches have been more about creating and enforcing divisions where they may not exist, and that has not been helpful to the debate. Neither has the scaremongering that has occurred in some cases, although that does not apply to the hon. Member for Barrow and Furness (John Woodcock), who made a sensible contribution. That approach may get headlines in local papers, but it will not do anything to protect services, or do anything for the people who work in local government, many of whom are dedicated public servants.

[Karl Turner (Kingston upon Hull East) (Lab)]

The hon. Gentleman referred to the contribution by the hon. Member for Bermondsey and Old Southwark (Simon Hughes); I, too, agreed with much of what he said. However, does the hon. Gentleman agree that, if the hon. Member for Bermondsey and Old Southwark had started by saying that, during the election, his party agreed with the same deficit reduction policy as mine, his words might have been more plausible?

[Andrew Percy]

I am not sure how I am supposed to respond to that intervention, but I suspect that it has served its purpose. However, the hon. Gentleman’s Front Benchers have told us absolutely nothing about what they intend to do. They cannot have a serious debate on any subject regarding public spending unless they come forward and say what they would do. All we know is that their plan is to protect local services. Is that still the case? If so, something else would have to be cut: is it to be schools or the health service? They have no credibility. It may get them a few cheap headlines, but it will do nothing to contribute to the debate about how we tackle the very serious deficit which this country faces.

[Simon Hughes]

It was unfair for the hon. Gentleman to be asked a question about what I said, so I had better give him the answer, which lies in something that he said earlier. He will know from his city council experience that when one is not running the show oneself, one has to work with others—by definition, one cannot get all one’s own way. That is fairly obvious.

[Andrew Percy]

Absolutely. That is what we should be doing on an issue as important as this. We should all be working together on the whole way that local government is structured to try to change it for the better.

[Tom Blenkinsop]

rose—

[Andrew Percy]

I will give way in a moment to my train colleague; we sometimes catch the same train.

Lots of references have been made to going back to the 1980s, or to the 1970s and “Life on Mars”, but some of the contributions have been like listening to “The Twilight Zone”. In my 10 years serving as a councillor under the previous Labour Government, I seem to recall the picture not being quite as rosy as that painted by Labour Members. We have heard many comments about Conservative and Liberal councillors criticising this Government’s settlement, although we do not know what it is yet. In my 10 years on the council, Labour, Liberal and Conservative councillors tended to criticise the settlement coming forward from any Government. That is the way of local government, largely because the formulae are so complex that there is always something that one is not happy with in any settlement.

When I was a local councillor, our authority went through a number of assessments, first, through the corporate governance inspection regime, and later through the comprehensive performance assessment regime. Labour Members cannot possibly be defending the millions of pounds that went into those schemes. I will explain what those schemes did to a city council such as Hull, which at the beginning of the Labour Administration had some of the most deprived communities in the country, and still had them 13 years later. If hon. Members want to carry out a value-for-money analysis of that, I will leave it to them to do so. The decisions that we were forced to take as a result of going through the CGI process cost our city council millions of pounds over those 10 years.

The council, which was Labour-run, was judged to be a failing council. There was some fair criticism, no doubt, but I do not know whether we needed the expensive regime process that came in to tell us that the authority was not necessarily being run as it should be. One of the most appalling recommendations that followed the CGI process was that we should appoint five corporate directors, but they were not to be employed on the same salary as our previous service area directors—no, we were to employ five corporate directors on salaries of £105,000.

[Justin Tomlinson]

Like my hon. Friend, I served for 10 years as a councillor. I fully echo his point, given the number of times that we were encouraged, following inspections, to spend huge sums of money on members of staff just to prove that we were heading in the right direction.

[Andrew Percy]

I thank my hon. Friend for that intervention. This is not something that my council experienced on its own—it happened across the country, as we know.

As I said, we were expected to pay our corporate directors a salary of £105,000, which most people in the city of Hull, and indeed across east Yorkshire and northern Lincolnshire, can only dream of. Then, in time, we had to appoint a new chief executive. Needless to say, they were not appointed at the same salary as the previous chief executive—there was a massive salary increase that had a knock-on effect on other local authorities in our area, which judged themselves against how much the neighbouring authority was paying. If we cannot get people to work in local government on salaries lower than that of the Prime Minister, we are doing something badly wrong.

I also well remember the settlements that we used to get from the Labour Government—it was a case of giving with one hand and taking away with the other. Nowhere was that more clear than in the best value process, which required us to measure 100 to 200 different things and report back to central Government. One of our best value performance indicators was to measure how many of our park benches had arms. I am sorry, but when I go drinking in the Dog and Duck, or in my real pub, the Percy Arms—[Interruption.] It is conveniently named. People do not come up to me and say, “Andrew, what we want you to do as a local authority is to measure how many park benches have arms.” They want their council to be providing services—over the past couple of weeks, gritting, snow ploughing, and so on. They do not want it to be spending hundreds of thousands of pounds every year reporting back on such silly measures.

[Jonathan Reynolds]

Is the hon. Gentleman suggesting that local authorities should be subject to no inspection regime whatsoever?

[Andrew Percy]

No, that is not what I said. I am saying that local authorities should be subjected to an awful lot less inspection, and that we certainly should not be running around paying people fat salaries to go measuring how many park benches have arms. If Labour Members are seriously suggesting that they want to maintain that system, I will happily give way to the hon. Gentleman so that he can explain to my constituents why my local council should continue to do that.

We all understand that there has to be some measurement of public services, whether they are in schools, the health service or local authorities, but we have to consider the proportion of time, money and resources spent on that. Under the previous Government, it got completely out of hand—some of it was well meant, but it had unintended consequences. It was alleged at that time that money was thrown at some councils, but it was not always thrown to provide better services; often it was spent on employing more people to sit behind desks and measure things that the public would, frankly, not consider to be a priority. That is what happened in my authority in relation to councillor training. We were suddenly told, following our CGI and CPA inspections, that we had to spend more taxpayers’ money on training councillors to do the job that political parties should ensure that they can do before they stand for office. That is why I refused to undertake councillor training—perhaps that says a lot about me.

One of the most ridiculous things that was produced by our council—no doubt by somebody on a good salary—was a guide to professionally appropriate language for councillors. At great expense to the taxpayer, we were issued with a guide to tell us that we must not call women flower, duck or love. If that is considered a good use of taxpayers’ money, I am afraid that I am in a different camp.

My other recollection from the past 10 years serving as a local councillor is that, although everything was fantastic and rosy, as we have heard from Labour Members, there were considerable hikes in council tax. The last time the Labour party ran Hull city council, it raised council tax by 10%. If that is evidence of good central Government funding to some of the poorest authorities, I do not know what planet I have been living on.

There is a sensible debate to be had about local government funding, but today’s attempts to create division are unhelpful. The hon. Member for Barrow and Furness made the point that I was going to make.

[Tom Blenkinsop]

I thank my fellow travelling companion, on certain days, for giving way. Labour Members are not coming up with scare stories. My information comes from the independent mayor of Middlesbrough and the leader of the Tory council in Stockton. We have also heard the example of the leader of the Tory council in Barrow. Those people have legitimate fears about the Government proposals. Yet again, we hear Back Benchers saying that they are aware of the situation, while the Minister says that he does not know what figures or information we are talking about. That only perpetuates the fears. Does the hon. Gentleman appreciate that?

[Andrew Percy]

One of the burdens of local leadership is to take the information that is provided and decide whether to perpetuate a possible myth that would cause hundreds or thousands of people to fear for their jobs or to disseminate the information differently.

[Tom Blenkinsop]

rose—

[Andrew Percy]

I will not give way any more because I have detained the House already and do not wish to whine on for too long.

Division has been created today by the image that many Tory shire authorities around the country are about to get a windfall and are doing very nicely, whereas everybody else faces cuts. No doubt there will be the slaying of the firstborn and all the other extreme language that we have come to expect from Labour Members. Such arguments are not helpful. I represent Goole and East Riding, which have some of the most deprived communities in England. East Riding suffers from being part of a larger authority that has very wealthy areas, with the consequence that its funding settlement has been among the worst in the country for the past decade. The council has tried incredibly hard over the years.

[Mr Watts]

Will the hon. Gentleman give way?

[Andrew Percy]

No, I will not, because the hon. Gentleman has had a lot to say today.

As the hon. Member for Barrow and Furness said, large rural authorities, as well as having considerable pockets of deprivation, face other challenges that are not taken into account. One of my two authorities is the largest unitary authority in the country. It is time that we looked at the structure of the grants system and made it take account of issues of rurality. For example, we know that rural poverty is hard to identify.

If the hon. Member for Scunthorpe (Nic Dakin) speaks, I am sure that he will talk more about our Labour local authority, which seems to take a different line on the spending cuts. I will allow others to conclude whether that is for political reasons, given that there are elections next year. However, my Conservative-run authority of East Riding has accepted that it will be tough. It has made decisions to prepare for that over the past two years, because it has known that it is coming. It knew what the Labour party was saying about 25% cuts—some of the biggest cuts in history—coming its way, so it started to make decisions accordingly. Even after the comprehensive spending review, one of my local councils said clearly:

“The programme involved a carefully planned reduction in expenditure in response to anticipated funding cuts.”

The council had been planning for the cuts already. Any half-decent leader of a local authority should have had that in mind, not least because they should have seen the previous Government’s plans. It is nonsense suddenly to pretend at this late juncture that it is all wicked and terrible, that nobody could have seen this coming, and that it would not have happened in the strange world that the Labour party currently seems to inhabit.

I have highlighted some of the waste and inefficiency that I saw as a local councillor. There are some very good people working in local authorities and providing services. The challenge for local authorities is to navel gaze, to look closely at what they are doing at the moment and to decide whether they can do that better. I give way one last time.

[Justin Tomlinson]

Does my hon. Friend agree that the decision to publish expenditure over £500 will allow a greater number of eyes to look over the information and identify much needed efficiency savings?

[Andrew Percy]

Of course I agree. That can be done relatively simply through programmes such as Oracle, which my former council spent millions of pounds investing in—perhaps investing should be in inverted commas.

[Karl Turner]

Will the hon. Gentleman give way?

[Andrew Percy]

I will give way because we are near neighbours and I like the hon. Gentleman.

[Karl Turner]

I am very grateful. I am tempted to agree with some of the points that the hon. Gentleman makes, but will he be kind enough to admit that when he was a councillor in my authority, I never heard him complaining about the grants that he received from my party in government?

[Andrew Percy]

The hon. Gentleman has obviously never been to a Hull city council meeting. Forgive me; after he was selected, he did come along. The first hour of most council meetings tends to be spent railing against whichever Government are in power and saying, “We haven’t got enough money. Can we have some more please?” I was no exception. I spent 10 years saying, “Wouldn’t it be nice if we could get a bit more?” The serious point is that, whenever we put forward an alternative budget, it was fully worked out and contained huge savings on such things as building rationalisation.

[Tom Blenkinsop]

Cuts.

[Andrew Percy]

No, not cuts—building rationalisation. There appears to be an irregular verb: they make savings, we make cuts. Any hon. Member who believes that we can continue to fund local government at the same level as in the past couple of years is living in la-la land. Nobody with a serious agenda would suggest that.

I make one final plea to the Minister on the funding of fire authorities. I have the highest regard for the fire authority in Humberside. In the past couple of years, it has faced challenging times because of changes to legislation made by the previous Government. Although there is an acceptance that savings must be made in fire authorities, I urge the Minister to keep a close eye on them and to ensure that reductions impact on the front line as little as possible.

The message should go out to all councils that there are tough decisions to be made, but that they can be made in a way that protects front-line services if our local leaders are brave enough. Local councillors have the choice of whether to scaremonger and make political points in the run-up to next year’s local elections, or, like my well run Conservative council of East Riding, to get their heads down, get on with it, make savings, but pledge to protect services.

[Several hon. Members]

rose—

[Madam Deputy Speaker]

Order. May I remind hon. Members that some 13 Members still wish to contribute to this debate, and that the wind-ups are due to start at 9.30 pm? Out of courtesy to their colleagues, I therefore ask hon. Members to pay a little bit of attention to the clock and do the maths themselves, to ensure that everybody can speak, otherwise we will have to have a time limit.

19:30

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I am grateful for the opportunity to speak in this very important debate. I will echo many of the sentiments of my hon. Friends and of many council leaders of all political persuasions up and down the country.

The speed, depth, spread and front-loading of the Government’s cuts to local government funding are unfair and unjustifiable. The devastating impact that they will have on the most deprived communities in our country, including many in my constituency, demonstrates that the coalition’s pledge to

“ensure fairness is at the heart”

of its decisions is as phoney as the Liberal Democrats’ pledge not to increase tuition fees.

The Government are using the deficit as an excuse to pursue their ideological aim of shrinking the state and destroying public services on which ordinary people rely. The Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), certainly got it right when he said in the House on 10 June:

“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]

The Government are balancing the budget on the backs of the poorest in our society, something that the Chancellor said he would never do.

In October’s spending review, the Chancellor announced cuts to local council funding of £5.6 billion. Although that in itself might seem like a shocking figure to anyone listening to the debate, the biggest scandal of those cuts is in the detail. DCLG figures show that far from the cuts hitting all communities across the UK equally, some councils will not see cuts to their budgets. In fact, they will get an increase in funding.

Over the next four years, the worst-hit councils will be in some of the most deprived cities and communities in the country. Hastings, Burnley, Blackburn, Hull and Barrow, and Liverpool city council which covers my constituency, are all in the most deprived 10% of councils in the country, and those councils will have their funding cut by at least a quarter, some by as much as a third. That, as we learn from the figures available from the Library, is while two of the least deprived councils in the country, West Oxfordshire and South Cambridgeshire, will have an increase in funding of up to 37%.

It cannot be a coincidence that every single council forecast to see an increase in its funding of between 27% and 34% is Conservative-controlled—and that at a time when my constituents are learning that Liverpool city council estimates that the city will be hit with £1 billion of cuts over the next four years. I repeat that figure: £1 billion. It simply is not fair. That follows the 9% cut to our area-based grant that Liverpool sustained earlier this year, before the Budget—the largest of any core city across the UK.

My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) articulately outlined the raft of cuts that Liverpool will sustain, which are in the process of being instigated. The truth is that we are not all in this together. The Government have a plan for unfair cuts that will support areas where it is electorally beneficial and hit those where it is not.

The Chancellor would have us believe that after the Government have cut back the state, making thousands redundant, the private sector will be there to move in and clean up the mess. If only it were that simple. The Government underestimate the relationship between the public and private sector. Far from increasing private sector demand, cuts to local government will damage small and medium-sized enterprises that rely on local authority contracts. Some £20 billion of the local government procurement market goes to SMEs, and the Federation of Small Businesses has stated that many small firms rely on public sector contracts for 50% to 60% of their turnover.

In addition, the cuts will reduce consumer demand. In some parts of Merseyside, 60% of the work force rely on the public sector for their income. For every £1 that a local government worker earns in Liverpool, they spend 70p in the local economy. When public sector wages are taken out of our local economy, we will see local businesses close, a spiralling welfare bill and public services under strain because of underfunding. It is bad economics and bad government. The Government are hitting the poorest hardest and tearing the fabric of our society. What this country desperately needs is jobs and growth, and what the Government have chosen to do will lead to misery and despair for people right across the UK, particularly my constituents.

[Simon Hughes]

I was perplexed when the hon. Lady said that the Library had stated what the outcome of the review was. I have just read the Library note again. She is entitled to her express her concerns, but she cannot suggest that the decisions have been made when we have not had the announcement yet. We have not even had the provisional announcement. Please will she just back off from all this shroud-waving stuff?

[Luciana Berger]

The figures have been arrived at from the comprehensive spending review, which is freely available to everyone in the House.

[Robert Neill]

It’s not the same thing.

[Luciana Berger]

I can hear comments from the Minister, and if he would like to say that it is not true, I will give way to him.

[Robert Neill]

I do not often intervene when time is short, but if the hon. Lady is competing to make the most cliché-ridden speech yet heard in the debate, she might at least have the decency to accept that she is citing figures that have no verification at the moment. She shames her argument by the cynical way in which she makes it.

[Luciana Berger]

Will the Minister therefore reject the analysis of many organisations, including SIGOMA and the Library?

[Tom Blenkinsop]

I do not think the Minister can question the integrity of my hon. Friend’s speeches, given the bicephalous nature of the debate. Back Benchers are saying that we all knew the cuts were going to happen, and that it was all on the cards, but at the same time the Minister is saying that there are no figures to draw upon.

[Luciana Berger]

I conclude by saying that I urge the Government to think again and not to introduce these savage, front-loaded, unfair cuts that will have a disproportionate impact on the areas and communities that need the most help.

19:37

[James Morris (Halesowen and Rowley Regis) (Con)]

It is a pleasure to follow the hon. Member for Liverpool, Wavertree (Luciana Berger).

As other hon. Members have remarked, the debate comes at a crucial time for local government. Many local authorities have been preparing for these tough times because, as others have pointed out, if there had been a Labour Government there would probably have been cuts of about 20 to 25% in local government anyway. Responsible local government leaders and chief executive officers have been making plans over the past two years to deal with the overall fiscal situation that we face. In my previous capacity before coming to the House, as chief executive of Localis, the local government think-tank, I worked with a number of local authorities across the country that were already beginning to make strategic plans to cope with the situation. They knew that whatever the outcome of the general election, there would be significant service transformation.

I think we would all agree that the outcome of the comprehensive spending review is a tough settlement. As has been pointed out, we do not know the exact figures that the Minister will reveal next week, but we know they will be tough. However, the review also provides local government with a serious opportunity to consider how it can transform its services and improve its service delivery.

Some Opposition Members have touched on the hypothetical distribution of the spending cuts around the country and questioned their potential fairness. As the hon. Member for Bermondsey and Old Southwark (Simon Hughes) pointed out, the way in which the formula grant is calculated is very complicated, and we would all agree that for many years it has been thought to be completely lacking in transparency. I agree with him that there is an urgent need to reform how we calculate the distribution. In fact, in the last Parliament, the Communities and Local Government Committee recommended that the Government increase the transparency of the existing grant allocation process. I hope that will form part of the Government’s review of local government finance, because more transparency in the allocation process is critical.

I represent a constituency that straddles two metropolitan authorities in the west midlands—Dudley and Sandwell—one of which is Conservative-controlled and the other is Labour-controlled. My central focus is to ensure fairness in the grant allocation process. However, there is a discrepancy between these two metropolitan authorities. Dudley metropolitan council receives £60 million less funding than Sandwell metropolitan authority. They have similar levels of population and deprivation, yet there is a £60 million discrepancy. I am not making a value judgment about either authority; I am simply saying that we need to get to a point where this grant allocation does not throw up such significant discrepancies, not just between metropolitan boroughs and the shires—that has been debated tonight—but between metropolitan authorities within particular regions.

Funding shortfalls were not the only legacy that Labour left the country. As my hon. Friends have argued, the previous Labour Government kept local government on a tight leash through centralised control and regional bureaucracy. The changes implemented over the past 13 years have stifled innovation locally, and given local government and communities the feeling that they have limited control and ability to make decisions and effect change. Unaccountable quangos, such as the Standards Board for England, the regional development agencies, including Advantage West Midlands, and the regional spatial strategies, all contributed to this feeling, and I am pleased to say that they are all on the way out. Removing those unelected, unaccountable and unwanted regional structures and bodies is a first step in a vital development for a new era of local government.

[Tom Blenkinsop]

What will areas without a local enterprise partnership do to get money through the regional growth fund?

[James Morris]

They will need to make clear arguments to the Department for Business, Innovation and Skills and the Department for Communities and Local Government about why there should be a local enterprise partnership. However, local politicians should be arguing in favour of making applications to the regional growth fund because, even outside the LEPs, businesses, the voluntary sector and local authorities can make applications to the regional growth fund.

Local authorities will now be given back responsibility from central Government to start making real decisions about how they spend their money. As the Secretary of State said, the Government have freed up, or un-ring-fenced, grants worth £7 billion from 2011-12 onwards, which the Local Government Association described as

“an important move towards a simpler funding mechanism that will help councils do their job”.

However, that should be only the beginning. There is huge scope for the introduction of other levels of financial innovation in local government. For example, hon. Members have talked about the potential productive use of tax increment financing. This lack of ring-fencing, this devolution of financial autonomy to local government, should be only the beginning. We also need a systemic reform of the services delivered and a re-evaluation of how local people can influence the way services are run. This transformation, with the coming presentation of the localism and decentralisation Bill, is at the heart of Government policy. A bottom-up approach to service provision is vital.

[Graham Jones]

Does the hon. Gentleman agree that a bottom-up process involves cost, and local authorities are worried now that such a process, which he has suggested, will double the pain following the cuts in the comprehensive spending review?

[James Morris]

Over the past 13 years, as I said, we have had centralised policy dictated from Whitehall. At a difficult time for local government, it is even more important that we invert that pyramid and have a bottom-up decision-making process in which local government can take more control of its decision making.

[Mike Freer (Finchley and Golders Green) (Con)]

Does my hon. Friend agree that top-down policies cost more than bottom-up ones? Under the previous Government, local authorities had more than 1,000 targets to report on, which cost my local authority £3 million a year.

[James Morris]

My hon. Friend makes a very good point. What he says is true.

The Government have asked local authorities and businesses to join forces in a bottom-up process, where they feel it appropriate, and through local enterprise partnerships, rather than top-down, regionally imposed structures. That will allow for economic development to be based on genuine local economic geographies, for investment to be tailored to local areas, and for LEPs, such as the one I have been advocating for the black country, to focus with laser precision on the particular issues affecting the 1 million people living in the black country.

That also illustrates that local authorities are capable of working together, often across political boundaries, to deliver services more proactively. In my region, Dudley, Sandwell, Wolverhampton and Walsall councils are demonstrating, by working together on shared services, such as information technology, trading standards, legal services and human resources, that we can save money and deliver better services for local people. That is happening across the country. For example, Hammersmith and Fulham, Westminster and Kensington and Chelsea councils are implementing a substantial shared-services programme across education and other services.

[Andrew Bingham]

My councillors would not forgive me if I did not intervene at this point. I have mentioned High Peak borough council already, but with its shared services with Staffordshire Moorlands district council, we saved more than £1 million last year, and will save a further £1.27 million this year. That exemplifies my hon. Friend’s point.

[James Morris]

My hon. Friend makes a very good point. This is the future of local government—working together, shared services and making savings, while delivering services more effectively.

I have long been an advocate of place-based budgets, which were touched on at the beginning of the debate. To give the previous Government their due, they introduced the Total Place pilots. Regrettably, it took them12 years to come up with the idea, but it was a good one. The implementation of place-based budgeting can radically change how services are delivered by pooling funding from a wide range of public, private and third sector organisations to tackle specific issues. I welcome the fact that the Government have announced that initially 16 areas will focus on the broad theme of helping families with complex needs. That model will help to make the delivery of services cheaper and allow for an improved focus on the needs of specific communities and individual users. This model needs to be expanded to encapsulate further policy objectives in the medium term. The Local Government Association estimates that doing so could save £20 billion a year by the end of this Parliament.

There are examples up and down the country of local authorities taking up this strategic challenge. As the Minister remarked, the recent announcements on public health demonstrate new roles and potential funding streams for local authorities that are also very welcome. However, that is not the only way to improve service delivery. The Cabinet Office recently introduced a right to provide for employees of public sector organisations. What this will mean in practice is the extension of mutuals and co-operatives in the provision of public services. The people at ground level often have a knowledge and understanding of the issues at hand, and they will now be able to start delivering services better. I am keen to see this model progressing in my constituency, and I can see the potential of mutuals in offering local services and youth services. The Government are also committed to providing local people with specific powers to improve their local area. These include devolving planning reform back to communities from unaccountable regional quangos, allowing local people to elect their own mayors and police commissioners, and extending the use of local referendums.

In summary, therefore, power is being handed back to local authorities, public sector workers and local people. Unlike what happened during the past 13 years, this will be real localism in practice, not the top-down centralisation that was passed down by the previous Labour Government. Such an approach can lead to a more personalised approach to the delivery of services, greater accountability and transparency and, crucially, given the economic mess, real savings, which the Local Government Association estimates could be as high as £20 billion over this Parliament. Local authorities need to see the current situation as an opportunity fundamentally to rethink how they deliver services, so that they can begin to do so more efficiently, more effectively and in the interests of the local people they serve.

[Several hon. Members]

rose—

[Madam Deputy Speaker]

Order. There is still a large number of Members wishing to participate in the debate, so I am going to impose a time limit on Back-Bench speeches, to see whether we can manage to get everyone in. We still might not, and the time limit might need to be revised. I should like to inform each Member that there will be a nine-minute limit on each speech, and that will be reviewed if there are still a lot of Members waiting to speak.

19:52

[Mr Dave Watts (St Helens North) (Lab)]

I am delighted to be able to take part in this important debate. I do so not only as the MP for St Helens North but as the chairman of the all-party parliamentary group on the special interest group of municipal authorities. Several Members have referred to the SIGOMA document, and I would recommend reading it to anyone. I know that the Minister has already read it. I would also recommend that he read the document produced by the Alliance group entitled “Hard Times”, which will nail some of the lies we have heard over the past few hours. I know that the Minister has read it, but I doubt whether the Secretary of State has done so.

Before I move on to my main points, may I say to the hon. Member for Bermondsey and Old Southwark (Simon Hughes) that it will not wash if he tries to take no responsibility for the cuts that are heading his constituents’ way? He said he did not want to see cuts in voluntary sector budgets, or in leisure and youth service budgets. He said that he did not want to sell the family silver or sell off any assets, but he is going to see cuts in all those areas because it will be impossible for his council to make the cuts that are heading its way without doing many of the things he does not want to do.

When the Minister responded to an Adjournment debate recently, he got very excited. I notice that he has also got very excited today. May I suggest that he keeps cooler than he did in the previous debate, because a number of us are worried about his health, and we do not want anything to happen to him before he has the chance to sum up the debate?

I should like to touch on the background to the cuts, the fairness of the last round of cuts, and the question of who will be affected by the cuts heading their way. I should also like to address the key issue of what the Government need to do to prove their own message that we are “all in this together”. I want to make it clear from the start that, like my own party, I accept the need for some cuts in public expenditure, and that local government had to make its contribution. There is no doubt that we had to reduce the deficit, and my party has been responsible for setting out how we would do that. The difference between us and the Government is the mix of tax increases and cuts. We also have a different view of the period over which the cuts packages should be spread. We would spread them over a much longer period than the Government propose, and we would not front-load them. We have heard a lot about front-loading today, and it has been suggested that the Secretary of State is going to review the position on that. The reason that most local authorities and communities are concerned is that the spending review made it quite clear that that is what the Government intend to do. I suspect that they are now trying to retreat from that position, knowing the implications of their proposals in their own areas as well is in ours.

My constituents accept that there has to be some pain and some cuts, but they do not like the fact that this same Government, while making dramatic cuts in public services, have allowed the banks to continue to pay massive bonuses to their staff and given the banks—the banks again!—a £1 billion tax cut. The Government have also now reneged on a promise to publish the details of those bankers who were being paid large bonuses. My constituents accept the need for cuts, but they do not think that the Government have been fair with them. They want to see a much fairer package of cuts and tax increases to address the plight we are in. My constituents—and, I suspect, those of the Minister—know who is at fault for the present financial crisis: it is not the previous Labour Government but the bankers, here and across the world, who turned the world economy upside down some months ago. It was only the straightforward action of the previous Labour Government that prevented the kind of recession that we saw under the last Tory Government.

What do my people want? They want a fair system of cuts. If there are to be cuts, they want to ensure that they are fair. They want to ensure that the most deprived communities and the most deprived people are protected, and that the cuts that have already been made in our communities are taken into account in any future round of cuts. They also want the cuts to be adjusted so that councils—not just ours but Liberal and Tory councils as well—will have the time to adjust their budgets. That means that we want to see more back-loading, rather than the front-loading that the Government are proposing.

It has been suggested that this is also about efficiency. The Secretary of State is quite good at putting out stories about the cost of plant pots in the Department for Communities and Local Government but, quite frankly, that is a smokescreen. These cuts will hit some of the most well run local authorities, including my own. My local authority, of which I was leader until I came into this place, is a five-star authority. It has excellent education and social services, and other council services. It has kept its council tax increases below the rate of inflation for the past 10 years, yet it faced massive cuts in its budget in May. It now faces cuts of up to £12.7 million in 2011-12, and £24 million worth of cuts in 2014-15. That nails the lie that it is only the wasteful councils that are being hit; some of the most efficient and effective are also being hit. My council will experience great difficulty because it is already efficient. Councils that are already efficient are going to have to cut services to the bone. Some of the comments from those on the Government Benches have suggested that their councils could make some savings, and I suspect that that is because they are very inefficient, compared with authorities such as my own.

I want to comment on the fairness of the proposals. I think that the Secretary of State has suggested that my contributions hark back to the 1970s and 1980s. The only good thing about being my age is that I have some experience of the previous Tory Government. I was the leader of the council when it lost £13 million and had to find a way of implementing that cut overnight.

I raised Westminster council with the Minister on last Tuesday’s Adjournment. It has been in contact with and written to me because it is upset about some of the things I said; I will respond in due course. Under the system that was in force under the previous Tory Government, if St Helens had received the same level of grant as Westminster, we would have had no cuts whatever, we would have had to pay no council tax whatever and we would have had enough money left over to send every one of my constituents to Spain for a week. That shows the level of fiddling that went on under the previous Tory Government, so we will take no lectures from this Government about fiddling the system.

The Minister said that we were going to cut the neighbourhood renewal fund—that is not true, and Government Members know it. The only argument they have relates to the three-year review, but all the grant systems were for three years. That did not mean that we were going to do away with the fund; it meant that we would reassess local government spending over the next three years. I am prepared to blame my own party for not introducing the changes as quickly as it should have, which meant that millions of pounds from our authorities went to some of the richest areas, including Westminster and many others. We did not move fast enough—

[Madam Deputy Speaker]

Order. Time is up.

20:01

[Gavin Barwell (Croydon Central) (Con)]

Before I was elected to this House, I had the privilege to serve as a councillor in Croydon for 12 years, to be a cabinet member responsible for a number of different service areas, to work with senior council officers and to meet council staff who were delivering services on the front line. I completely understand their feeling that it is deeply unfair that some of them are going to be asked to pay the price with their jobs of dealing with the mistakes made in our banking system and the mismanagement of the public finances by the previous Government.

I speak in opposition to the motion not because I think the concerns expressed by Labour Members are misplaced or phoney—Members have spoken with passion about this issue—but because they fail to recognise that the Government’s approach is very similar to the one a Labour Government would have adopted. In opening, the shadow Secretary of State said that the coalition Government were going deeper and faster than a Labour Government would have gone. Let us take each of those assertions in turn.

The suggestion that we are going deeper is palpably untrue. Labour policy was to get rid of the structural deficit over two Parliaments; the coalition’s policy is to get rid of it over one Parliament. There is no difference whatever about the size of the cuts; there can be no argument whatever about that.

As for speed, let us look at the previous Labour Government’s policy, as set out in the pre-Budget report of 2009. According to the Institute for Fiscal Studies, it meant reductions in non-protected Departments—the Labour Government were going to protect health, education and Sure Start—of 25%. If we look at what the coalition Government have delivered, because of the cuts in the welfare budget, some of which Labour Members perfectly reasonably wish to oppose, we see an aggregate 19% reduction in the non-protected departmental spend. In other words, the pace of change for cuts in non-protected Departments in this Parliament is slower under the coalition Government than it would have been under the plans of the previous Government.

The first two lines of the Opposition motion seek to make capital out of the fact that the reductions that local government is being asked to make are larger than those demanded of central Government. It is nonsense for the Opposition to criticise us on that basis because Labour policy was to protect the NHS, the Department for International Development budget, the schools budget and the Sure Start budget. If they are to be protected, it is an obvious consequence that the average reduction across central Government is going to be lower than the reduction in local government, which the Labour Government had not chosen to protect.

I have been a Member for just over six months. During that time, I have had to support a number of measures that, in an ideal world, I would not support. Time and again I hear from Labour Members that they do not agree with our proposals: they do not agree on tuition fees; they do not agree on the mobility component for people in residential care who receive disability living allowance; they do not agree on local government funding; and they do not agree on cutting the teaching grant for universities. It is all very well for Labour Members to tell us all the things with which they do not agree, but that has no credibility unless alternatives are advanced. I have yet to hear from the Opposition one area where they believe that the coalition Government are not cutting enough. They have not told us that instead of reducing local government spending or teaching support for universities, alternative cuts can be made that the Opposition are prepared to announce. Until they come up with an alternative package, their objections have no credibility.

[Tom Blenkinsop]

One small but significant point relates to fiscal policy and taxation. This Government have made large promises about imposing greater levies on bankers and other such people, but they have quickly run away from them. Labour Members would look to have a far more stringent regime to hold those types of people to account.

[Gavin Barwell]

I note that the coalition Government introduced a levy on banking, which the previous Government did not. If the Opposition want to propose tax increases additional to those announced by the Chancellor, we should hear what they are and discuss them. That is a perfectly reasonable basis on which to debate.

The second main theme in the motion is fairness, which is a perfectly reasonable test. I would like to raise two issues. First, Labour Members have quoted figures, expressing the concern that the authorities most dependent on Government funding will face the most significant reductions in grant. Conservative Members have been concerned about some of the phraseology used, particularly about the implication that these decisions have all been made. They have not. There is certainly an issue that the Government need to look at, and I believe that the Secretary of State said that he was aware of it. If we just salami-slice the Government grant going to each council, that will have a differential impact on the spending power of local authorities around the country. In the interests of fairness, the Government need to address that problem. Labour Members, however, should not have given the impression that these things are all done and dusted; they are not. We have not yet had the statement, and the Minister is not in a position to give the assurances he has been asked to provide until that statement is made.

I would also like to look at the issue of fairness as it relates to the record of the previous Labour Government. I want to make a non-partisan point. People allege that money was shunted from the south to the north, or that under the Tory Government Westminster and Wandsworth were favoured. The reality is that the system is completely broke. If we look at the figures for unitary councils, the London boroughs and the metropolitan districts under the last five years of the Labour Government, we see that about 30 authorities—my authority was one of them—had a real-terms cut in funding of more than 2%. It is not all outer London boroughs, however; it is a completely random mix of authorities, including places such as Newcastle-upon-Tyne and Liverpool.

At the other end of the scale, we see that Blackpool received an increase of nearly 11%, Telford and the Wrekin 13.3%, Torbay 15.7%, Blackburn 16.7% and Rutland an incredible 25.8%. It is very difficult, I think, to discern a pattern between those authorities. I would like the shadow Minister to explain in her summing-up speech why Croydon gets a 3% real cut, but Rutland gets a 25% increase. [Interruption.] This happened under the Government of the hon. Member for Worsley and Eccles South (Barbara Keeley), so, with respect, the explanation should come from those who were responsible for the changes.

In applying the reductions, it is important that the Government take account of the authorities that have already seen a real-terms reduction in their funding, as opposed to those that saw a period of largesse under the previous Government. I happily acknowledge that local government as a whole did see real-terms growth in funding under the previous Government, but that did not apply to all individual local authorities. It seems wholly unreasonable to impose the same reductions on authorities that have already had to make cuts in comparison with those that have seen significant increases in funding.

I reiterate the point made in the Local Government Association briefing, which many Members will have received. The same point about fees and charges was made by the hon. Member for Bermondsey and Old Southwark (Simon Hughes). For a number of local authority services, the charges that local authorities are allowed to levy by statute do not cover the costs. One way for the Government to help local authorities is by giving them the freedom to increase some of those charges. None of our constituents will welcome paying higher fees, but they might well prefer that option to reductions in the vital public services on which they depend.

Let me pick up another point made by the hon. Member for Bermondsey and Old Southwark. He was very concerned about cuts in non-statutory services such as support for the voluntary sector and youth services. My local authority is having to consider those services. I hope the Minister will tell us that the Government will think again about what is statutory and what is non-statutory. Surely if we all now believe in localism and believe that local authorities are best placed to make choices, we should allow authorities much more flexibility in delivering services locally. If we do not, many of them will not be able to touch a large chunk of their spending because it is statutory, and the reductions will be concentrated in the voluntary sector.

In a report published before the general election, the Institute for Fiscal Studies spoke of measures to reduce the deficit. According to the IFS,

“most likely it will come from a combination of reductions in the quality and/or quantity of public services provided and families being made directly worse off financially through cuts to welfare benefits and increases in tax. Efficiency savings alone will not be enough to fill the deficit.”

Members on both sides of the House must stop pretending that all that can be done easily. Whoever is running the country—whichever party forms the Government—the job of deficit reduction will be painful. We should stop engaging in a feigned debate about whether it is ideologically based, because it would confront whoever was governing the country. We should focus on the changes that Government can make to support those in the front line who are having to make difficult decisions so that they can do the best job in protecting the vital public services on which all our constituents depend.

20:11

[Alex Cunningham (Stockton North) (Lab)]

We have already heard from many of my hon. Friends about the impact of local government cuts on their constituents and local authority workers. Let me begin by paying tribute to those workers, who deliver services not in return for salaries of more than £100,000 or more than £25,000 a year, but in return for salaries of less than £15,000—and, in the case of the many who are women, less than £10,000 a year.

Let us be clear about the fact that, despite what the Government say, these cuts will affect care for the elderly and children. They will affect schools and education, thus ensuring that our children do not have the best start in life. There will be safety reductions as funds for our fire brigades are devastated. There will be reductions in street cleaning, closures of swimming pools, art galleries and leisure centres. There will be cuts in the funds of voluntary organisations that support some of our most vulnerable people, cuts in the funds to support investment—including inward investment—in jobs, and cuts that will cause the gap in life expectancy between our most deprived and our most affluent areas to continue to widen, rather than continuing to close as it did under the Labour Government.

Let me say something about how the cuts will affect people in Teesside, and particularly in the borough of Stockton. Before becoming a Member of Parliament, I served as a councillor on Stockton borough council. I know from direct experience that Stockton has an excellent local authority that provides first-class services for local residents. I have seen the successes that it has achieved. I have seen improvements in education and care for the elderly and the young, improvements in housing, the development of Sure Start Centres supporting not just vulnerable families but working families throughout the borough, and the development of the arts with the international riverside festival and our celebrated ARC arts centre. The council has a “can do, will do” approach, and it is worthy of its “council of the year” title. I am confident that it will work hard to minimise cuts in front-line services and redundancies, but given cuts of this scale, even the best local authorities will struggle.

I am told that 50,000 people working for local authorities throughout the country have already been told that they could lose their jobs. That number will inevitably rise to the half million predicted by the Government, although I know that they are now trying to talk that number down. The Teesside Evening Gazette reports today that no fewer than 900 employees of Redcar and Cleveland borough council—a relatively small authority—have been given notice that their jobs are at risk, just 20 days before Christmas. Of course, the people who rely most on council services tend to be those on lower incomes. Why, then, are councils such as Hartlepool, in Teesside, and South Tyneside facing cuts of between 25% and 29% when South Cambridgeshire and West Oxfordshire councils are receiving increases of up to 37%?

In March this year, the Chancellor told the News of the World that he would not balance the budget on the backs of the poor. Now that his party is in government, he persists with the mantra “We are all in this together”. I do not think that many people, regardless of political persuasion, take that claim seriously.

It is not only the Conservatives who have back-tracked on their promises. The Liberal Democrat Manifesto said:

“Our core aim is to hard-wire fairness back into national life.”

I do not think that anyone working for a local authority who loses a job as a result of these cuts will think that there is anything fair about it, and the same applies to those who lose vital services.

[Angie Bray (Ealing Central and Acton) (Con)]

Even some of the hon. Gentleman’s colleagues have told us during the debate that they accept the necessity for cuts. We have seen the figures in the Labour party’s “pre-manifesto”, which revealed their own plans for the non-protected Departments: cuts of about 25%. Why does the hon. Gentleman persist in claiming that it is only the Government parties who propose cuts?

[Alex Cunningham]

We accepted that there would be the cuts outlined by my right hon. Friend the Member for Don Valley (Caroline Flint). However, we believe that cuts must be fair, and that cuts as deep and as fast as those proposed by the Conservatives and Liberal Democrats must be questioned.

I hope to secure a Westminster Hall debate in the new year about the impact of cuts on the voluntary sector, 32% of which relies on local authority funding. I know that many excellent third-sector organisations fear that the cuts will severely limit their work. Stockton is trying hard to protect our third sector, but will face real challenges. I should be interested to know how cutting funds for those organisations will do anything to further the big society programme on which the Prime Minister is so keen. The third sector is the big society in action, and exposing those groups to possible cuts seems incoherent given the emphasis on big society and localism.

Of course, we must not consider local authority cuts in isolation. PricewaterhouseCoopers forecasts that for every job lost in the public sector, another will be lost in the private sector. That means 1 million lost jobs. One industry that we know relies heavily on the public sector is the building industry, which has already lost out in Teesside as a result of the cancellation of the Building Schools for the Future programme, as well as the scrapping of the new hospital to serve the North Tees and Hartlepool area. Spending by local authorities boosts the economy, and there is no doubt that the cuts will indirectly make life difficult for many local businesses.

[Bob Blackman (Harrow East) (Con)]

Will the hon. Gentleman give way?

[Alex Cunningham]

No, I will not.

Let me finally say something about the Cleveland fire service, which is critical to the safety of people in the area that I represent. I am told by the Fire Brigades Union that 68% of Cleveland’s funding comes from a central Government grant. Given that that grant is set to fall by 25%, the chief fire officer is seriously concerned about the possibility that lives will be put at risk by the cuts. The seriousness of the situation is exacerbated by the fact that our local area has large numbers of high-risk COMAH— control of major accident hazards—sites owing to chemical and other manufacturing in the area. The Minister responsible for the fire service has already refused my request for him to visit Teesside and see the problem for himself. I have written asking him to meet local MPs across the political spectrum, as well as representatives from Cleveland fire authority, to discuss the issue here in Westminster, and I hope that I shall receive a positive response.

These cuts place our communities at real risk, and I hope that the Government will think again.

20:19

[Brandon Lewis (Great Yarmouth) (Con)]

Our residents across this country have been losing interest in local government for years. Turnout in local elections, and particularly local government by-elections, shows that many people are not interested. From speaking to residents, I have learned that the biggest reason for that is that over the past 10 years and more councillors have often, rightly, said that they cannot deal with a given issue because it is under central Government control.

It has already been said in our debate that the previous Government gave money but it always had strings attached. That was the problem. During the 11 years I spent as a councillor and council leader while a Labour Government were in office, my experience was never that we had plenty of money or that we could ever do things without strings attached. Every single time we looked at doing something for our residents, we had to go through some aspect of the tick-box culture. There had to be a consultation on a proposal, for instance, even if that proposal had been in the local election manifesto, or we had to do something differently to make sure that we kept one quango or another or the Audit Commission happy, because officers’ views were often that if we did not do so, we would be punished somewhere else, with a different grant being cut or changed in a different area.

I agree with my hon. Friend the Member for South Derbyshire (Heather Wheeler) that a key problem is the stranglehold that has been put on local government for years. I also agree that the fact that the previous Government held local government to ransom over their finances made it almost impossible for local councils to say that they were able to do very much directly for their local residents, even in areas where they were not struggling. That was because they were having to find money to cover bus passes, swimming pools or licensing. They were also then being handcuffed in respect of planning rules.

It has been a difficult time for local government and I understand why residents have started to switch off and disbelieve what they read in election manifestos. After all, under Government statutory requirements those in local government who were working to an election manifesto would probably still have to consult on any measures afterwards, so what was the point of the manifesto?

I hope that the ending of ring-fencing, the freeing up of local government and the localism Bill when it is introduced will result in councils being able to go back to concentrating on actually delivering for residents, instead of ticking these boxes, which are so often caught up with a financial string. If that happens, elections will actually matter again and people can believe that when they vote for a councillor and a party in a local election, that party can deliver on its manifesto. People will be able to expect to have local manifestos on which they can hold the party and council to account, rather than just always being fobbed off with, “We can’t do that, we are restricted on this, or there’s got to be consultation on that.” That is a huge issue for local government. I sometimes think back to my time as a councillor and the amount of officer time that was spent on ticking these boxes and on putting bids together for money we may or may not get, depending on which box we tick.

[Graham Jones]

Is the hon. Gentleman talking about the regional growth fund?

[Brandon Lewis]

I am talking about a whole range of funds across the board. We would have officers spending a huge amount of time on every single matter. That was even the case in respect of initiatives like the comprehensive performance assessment. The sums involved would be up to £250,000 a year. If we added up the amount of officer time spent in that way, we would find that local government could save a huge amount of money. I know that from speaking to my local authority in Great Yarmouth. I am proud to be able to say that, when the announcements were made earlier in the summer, our managing director and councillors said, “We can deal with this.” We were one of the hardest hit local authorities, but they felt they could deal with it. They are now, rightly, looking at how they might share services.

One of the problems we had with the previous Government was their approach. They had to have estimates—even for unitary government. We debated that topic in the Chamber just a couple of weeks ago. The argument was that there could be a couple of million pounds a year in savings from having unitary authorities for Norfolk and Exeter, but one of the problems in respect of Norfolk was that we would still keep the county council and all the councils we had, and just convert one city council to a unitary. I would, therefore, still dispute whether there would have been any saving in officer money and time from moving to unitary status. However, the previous Government wanted to do that in the belief there might be savings down the line, when in fact what we are now seeing in Norfolk is authorities coming together to look at how they can share services, both county with borough and district councils and district councils across each other.

We are considering some of the savings that have to be made and—as other Members have commented—the salaries earned by some people in senior management in local authorities. We should also consider sharing services and focusing on local accountability, with members representing their residents. It should not be based on where a person’s office might be or whether they work in one, two or three authorities. They are there to deliver a service, not tick a box for Government. If we were to do that, we could start seeing huge savings across the board.

The key is getting back to what local authorities are for. I fully support the Government’s position and will be voting against the motion because it harks back to the bad days of the past 10 or 15 years when Government held local government at arm’s length but were then able to blame it for being unable to deliver because, as Labour Members have already mentioned, there were strings attached. Instead, we should set councils free and give them power not to be ring-fenced and to make their own decisions. That will make them more accountable—transparency is a huge part of this. People will then understand that their local authority is the authority responsible for specific areas, that it has the power to deliver and that it is accountable at an election, which is really what democracy is about. That would be a big step forward for local government.

I know that other Members are keen to speak, so I am happy to conclude on that point.

20:24

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

May I say to the hon. Member for Great Yarmouth (Brandon Lewis) that if he thinks that councillors had a bad time under the Labour Government, he really has not seen anything yet? I say that as someone who was a councillor between 1982 and 1998. I spent eight of those years in opposition and eight controlling the council, with only two of those years under a Labour Government. I watched the poll tax come in and I watched what we had to do during those times, so I suggest that he has lived through a pretty easy time in local government. If he thinks that by not having to tick boxes constituents are going to come out to vote in local elections, he underestimates the need for all politicians, national and local, to engage with our electorate. I suggest that engagement with our electorate is the thing that matters.

[Brandon Lewis]

The point that I was making was that by not being focused on ticking boxes for central Government and quangos, councils can go back to focusing on delivering services for residents, and that is what matters.

[Siobhain McDonagh]

Perhaps now I should take the opportunity to explain to the House and the hon. Gentleman just why I am not sure that my local residents will feel exactly the same way. Most Members will not have heard of my local council—Merton. It is a quiet, low-profile London borough. It is not the poorest or the most exciting. It generally gets on with it, whether it is Labour or Conservative-run. It is a council that likes to sweep the streets, collect the rubbish and look after people as best it can. Its services are not perfect and could improve, but most of the time it does its best. I suggest that the same applies to most of the councils represented by hon. Members.

Merton council needs time to change and to get about sharing services, but that time does not exist if those spending figures are to be released next week. Next week, we will learn the figures and by 5 March my council has to say what its budget is for next year. If I know anything about local government, it is that huge reforms are not brought about in three months.

Merton council will have to make cuts of £24 million this year—that is for the cuts it anticipates and those it will have to make because of an expanding need for services, such as school places and care for the elderly. That is £24 million out of a budget of £150 million. The people on that council are not people who squeal and they are at a meeting tonight just trying to get on with it, but how will they do this? They have already identified £10 million of cuts this year, which is the largest figure ever at this point in a financial year for the next. They hope to get to a figure of £14 million by January, but the following £10 million will be really hard to find.

[Bill Esterson]

rose—

[Siobhain McDonagh]

I cannot give way, because I do not wish to take up too much time—I hope that is okay. The people on the council are finding that task hard, not because they do not want to do it and not because they do not want to bring about shared services, but because they cannot do it in the time available. As they seek to cut that last £10 million, the only opportunities left for them are to go for public services, for the voluntary sector, for the youth service—even though they do not want to do so—for personal care for elderly and disabled people and for the costs of special needs transport. That is because those areas are traditionally where councils have gone when they need to make cuts quickly. Those cuts will be devastating and what we are doing should not be about that.

I hope that the Minister will have taken that on board in any work he has been doing behind the scenes over the past few months with his fellow Ministers and will give councils such as mine time to bring about changes in their services. There is this idea that, somehow, boroughs all over the place will want to work with Merton council. I do not think it is Merton council’s fault, but not too many want to come in for conversations about that. This year, the council will be combining with another council and one big department to save £2.5 million. We want to do more of that, rather than the terrible things that I have just suggested, but we do not have the time and the ability to do so. Councils simply do not have the capacity not only to run services but to do the sort of consultation and detailed legal work that is needed. Their only other recourse is to go out to private consultants and the cost of that is wrong and prohibitive at a time when every pound matters.

This year, Merton will share a head of legal and civic services with Richmond upon Thames council. I hope that that will be the stepping stone to more joint working over the coming years, but in an effort to make the cuts this year all our councillors will do things that we would rather they did not. Our constituents will ask us to defend them at the same time as our Labour groups and our Conservative groups will say to us, “Don’t have a go at us. It’s you lot who decided this.”

We are going through a very difficult time and I plead with the Minister to give councils as much time as possible to reform their services, to consider how they can do things and to consider being ingenious. The idea that many of them have been doing nothing year in, year out and that they have not been making cuts already is completely not the case.

Let us consider adult social care. I do not know how other hon. Members feel, but I rage when I hear about the £2 billion fund because personal care is the biggest budget, outside the schools budget, that local authorities have to cut. That £2 billion is available because councils will be doing some pretty awful things, such as considering older people’s eligibility for domiciliary care or to go into homes. That is what we are facing. If we have the opportunity, we need to stand back and give councils more time to reform and to do things differently. Otherwise, the choices are particularly painful—not for us, but for some of our most vulnerable constituents.

20:31

[Bob Blackman (Harrow East) (Con)]

It is an honour to follow such a thoughtful speech as that made by the hon. Member for Mitcham and Morden (Siobhain McDonagh). Before I came to the House, I spent some 24 years in local government—20 years as leader of my group, 10 years setting budgets and 10 years proposing opposition budgets. Throughout that time, I gained a great insight into how local government finance works and has worked over many years under different Administrations.

We should remember that in that context, local authorities have, over the past three years, faced 3.5% reductions, or efficiency savings, forced on them by the then Labour Government. In London, some 23 of the 32 local authorities have been on the floor of the settlements. For the past three years, therefore, they have always had below-inflation increases. If education is stripped from those budgets, they show a real-terms reduction in funding in London over the past three years. Pretensions that local government saw its halcyon days under the Labour Government are, I am afraid, completely false. We need to put them properly in their place.

We must also consider the proposals made by the Labour Government at the time and what local authorities anticipated if Labour had won the general election. We know that they would have halved capital expenditure, and this Government are preserving capital expenditure and ensuring that there is investment for our future. That is critical for the whole ambit of local authorities and all public sector authorities.

We also must consider what local authorities now have to administer. The budget for which I was responsible in the London borough of Brent was some £1 billion, but we only had discretion over £250,000 of it. The rest was passed from central Government to the local services without any interference or control by the local authority whatsoever. We need to recognise those changes.

[Graham Jones]

Is that not precisely what is happening when the Government announce that they are ring-fencing education funding? Is that not just a repeat of what the hon. Gentleman has just described?

[Bob Blackman]

Clearly, the Government are removing artificial ring-fencing from local government expenditures. Local authorities up and down the country rightly complain about having been given money in very tightly constricted salvos that could be spent only on particular services in particular ways. Often, they could not spend it within the given time frame and so would lose it. That is ridiculous.

We need to look at how money can be saved. There is multiple handling of cases in local authorities. I know of social services cases in which the application for disabled facilities grants has gone through 17 pairs of hands before being approved. What nonsense. We have to streamline systems to ensure that, at most, one person reviews a case and another checks that it is correct. Applications should not go through 17 people.

We should have computer systems that capture data once. People who apply to a local authority for particular services frequently have to fill out a multitude of forms and the relevant information then has to be entered many times by various people in different areas.

[Tom Blenkinsop]

Is the hon. Gentleman advocating identity cards?

[Bob Blackman]

No I am not. I am saying that when the weakest and most vulnerable people in society are asked to give information to local or national authorities, we can enter the data once, administer the benefits they are entitled to and make sure they get the proper benefits, rather than having the multiplicity of systems that grew up under the Labour Government.

We spend more than £1 billion on administering housing benefit, but why does every authority need a separate back-office organisation for that? Those contracts are administered by a small number of suppliers, so why not combine them, strip out some of the administrative overheads and remove duplication?

[Heather Wheeler]

We have done exactly that in South Derbyshire. We have got into a grouping with Northgate and we will be the east midlands hub, so if hon. Members want to save money and pay us to do their housing benefit, we will do it for them.

[Bob Blackman]

I thank my hon. Friend for taking this opportunity to advertise the hub that she is involved in.

Clearly, we need smarter procurement in local government. It almost makes me spit when tenders for local government services come back with visibly inflated prices because they are for public, rather than private, services. Many of the tenders for public services that come back would not be accepted by any private service. We need to examine that carefully.

We also need to create an environment in which there is greater opportunity for mutualisation. One thing I did in local government was to create a local authority mutual insurance operation for London. It would have saved my authority and every authority that joined it £1 million a year, but it was deemed to be illegal so we could not operate it. I ask Government Front Benchers to change the position so that local authorities can come together to save money for local residents and also provide much better services.

We should consider what unused assets local authorities have. An awful lot of land could be sold in appropriate ways and the money could be used for appropriate reinvestment in the local area. We also need to consider local authority balances. Some authorities have sums of money sitting totally unused instead of benefiting the public, whereas other authorities have very small balances and will find the reductions much more painful. Many authorities need to examine their conscience and use those resources to benefit local people.

Everyone knew that the cuts were coming. Everyone knew that there needed to be a plan. In the authority on which I served before I came to the House, we had a plan to reduce our expenditure by £100 million over four years—that is, £25 million or 10% a year. If we could do it without a huge impact on public services, I do not believe there is any authority in the country that could not do it.

[Graham Jones]

Will the hon. Gentleman give way?

[Bob Blackman]

No, I shall not give way as I do not have much time. [Interruption.] No. I have been given the extra time already.

The borough that I have the privilege of representing now also has a plan to save some 10% of its expenditure per year, and the plan is ready to go, depending on the settlement. Clearly, as my hon. Friend the Member for Croydon Central (Gavin Barwell) mentioned, there are wide disparities in the formula grant that authorities are given. That is the key issue that the Government must address to make the system fairer, more transparent and more open, so that we can all examine it and make sure that the right resources are going to the right authorities.

20:40

[Heidi Alexander (Lewisham East) (Lab)]

This time last week, my constituency was the scene of violent protests about local government cuts. Town hall windows were smashed, four individuals were arrested and 15 police officers were injured as Lewisham council met to consider budget cuts of £16 million. Although the violence was due to a small minority intent on making trouble, there is no doubt that my constituents are angry, and they are right to be.

Lewisham bore the brunt of public outrage about local government cuts last week. Sadly, the £16 million worth of savings agreed by the council is probably just the tip of the iceberg. In the next four years Lewisham expects to have to save somewhere in the region of £77 million, just under a third of its total revenue budget.

[Joan Ruddock]

Did my hon. Friend hear the Secretary of State suggest that Lewisham council should look to its £60 million worth of reserves to deal with the issue? She knows, as I do and as he does, that of those reserves, the majority is for capital spending. The general fund is simply 2.5% of total budget. Does she agree that it would be utterly irresponsible to spend emergency reserves and do nothing to deal with cuts of up to £70 million?

[Heidi Alexander]

Indeed. My experience on Lewisham council was that the only occasion on which reserves would be considered for use was when that would be a fiscally responsible thing to do.

[Bill Esterson]

Will my hon. Friend give way?

[Heidi Alexander]

I should like to make progress as I am conscious of the time.

The demonstrations at Lewisham council last week did not take place because that is a Labour council intent upon slashing services or haemorrhaging staff. The demonstrations at Lewisham last week were a direct result of a Tory-Liberal Government determined to cripple councils the length and breadth of the country. I first learned about the riots last Monday when I was on my way home from Westminster. As I sat on the train, I could not help but reflect upon how unfair it was that former colleagues of mine were being blamed for the Government’s decision to inflict cuts that go well beyond anything that is sensible or necessary, and well beyond anything that my party would have done, had we been in power.

As I sat on the train, I also realised that at the exact time that council employees in Lewisham were trying to hold back an angry mob, hon. Members in this Chamber were debating reform of the banking system. For me, the two are not separate issues. Local democracy is rightly accountable for the decisions that it takes, but surely we have to ask: where are the protests outside the plush offices of the bankers whose excessive risk taking plunged us all into this crisis in the first place? For that matter, where are the protests outside the office of the Secretary of State, whose failure to stand up for his Department has forced Lewisham council into its present position?

I am not for one minute suggesting that the violent protests in Lewisham should be replicated anywhere, but surely those responsible for the current financial state of local government should be made aware of the effects that their actions are having on communities throughout the country.

There’s the rub: for me, the Government do not get it. They do not seem to get the fact that by heaping cuts on local authorities, they run the risk of putting thousands upon thousands of people out of work. Ministers do not seem to understand that draconian cuts to local government will simply take work away from private firms—the very firms that they are desperately trying to grow. Nor do Ministers seem to understand that the scale of the cuts could decimate voluntary and community organisations at the precise moment when they want them to do more. Most worryingly for me, there seems to be no acknowledgement that the size and speed of the cuts could force councils to dismantle the services on which the most vulnerable members of our society depend.

[Graham Jones]

Will my hon. Friend give way?

[Heidi Alexander]

I would very much like to make some progress, and I am conscious that there is a time limit.

My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) spoke earlier about elderly care, on which I, too, would like to focus for a few minutes. I have been reprimanded by the Secretary of State in this Chamber before for daring to suggest that the supposedly extra money for adult social care announced in the comprehensive spending review would be wiped out by the cuts to local government. Well, let me tell the Minister today that there are many authorities that share my concern. In fact, a recent report by London Councils estimates that even with the “extra” £2 billion announced in the CSR, funding for adult social care will fall by £1.8 billion over the next four years. During my time as a councillor, the worst meetings that I had to attend were those at which we considered changing the eligibility criteria for care packages—the threshold of need that the elderly and those living with disabilities have to meet to get support. In the end, we did not raise the threshold in Lewisham, and I am pleased that we did not do so. It came down to a question of human dignity, and I was proud to be part of a Labour council that recognised that.

However, with the current scale of cuts facing local government and the demand for care increasing by the day, I cannot see how much longer councils will be able to maintain the level of support that they currently provide. If they do maintain current levels of care, other council services will have to take a big hit. They include libraries, leisure centres, recycling facilities and street sweeping—many of the things that people take for granted. Does the Minister realise that those are the sorts of impossible decisions that he is asking council leaders to take?

I accept that in many areas there may be ways of doing things differently—doing things more cheaply and doing them better—and that is precisely what good, forward-thinking councils have been doing over the past few years. My concern about the Government’s approach to local government is that it seems to be based on a mistaken belief that councils are characterised by rampant profligacy, sky-high salaries, and hundreds and hundreds of non-jobs. Nothing could be further from the truth. My experience tells me that, year after year, many councils have been working hard to make themselves more efficient, the result being that there is now simply not much fat left to trim. The way in which cuts are being disproportionately squeezed into next year—although we hope we might get some good news on that—will also make it harder for councils to take the sensible, long-term strategic decisions that are needed.

My concern about the scale of the cuts to local government is that it will limit the ability of councils to address some of the big issues of our time, and restrict the innovative work that some modern, progressive councils are already undertaking. Let us take climate change. Although new forms of electricity generation and more energy-efficient homes may help to reduce our carbon emissions, some of the really big differences will come about only by people changing their behaviour. That does not happen by magic, and although Ministers might be concerned that this smacks of the nanny state, I cannot help but think that it is local government that is best placed to assist communities in reducing their carbon footprints. However, that type of work is resource-intensive, and with resources so much scarcer, councils will have to stop doing other things if they want to continue such work.

In conclusion, I believe that the scale and speed of cuts to local government is part of a deliberate strategy by Ministers to shift the really difficult decisions on to someone else. It is an attempt to deflect attention away from themselves and on to council leaders up and down the country. To give Ministers their due, as a political strategy you cannot knock it, Mr Deputy Speaker, but as a strategy to reduce the country’s deficit fairly and sensibly, it is nothing short of a disgrace.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. As we can see, six Members are still trying to catch my eye and there are 40 minutes left of this debate, so I am sure that hon. Members can do the mathematics. Perhaps they will want to be generous in order to ensure that everybody gets in, because the numbers are equal on both sides of the House.

20:50

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

I welcome in particular the speech by the hon. Member for Mitcham and Morden (Siobhain McDonagh), one of the few people who seems to have read the motion. Many hon. Members have tried to support or, indeed, argue against the scale of the cuts, but the guts of the motion are really about front loading and authorities’ ability or inability to deal with that in the short term.

Scaremongering has been mentioned, but back in Bradford the council has been working on the figures, and the numbers on front loading are scary. Those are the figures we have been given, so it is a question not of scaremongering but of what we have been given to work on and are working to.

Members have traded stories and histories of their time on local councils. I had 26 years on my local council, 13 under the Tories and 13 under Labour, and with all due respect to my coalition partners, I can tell hon. Members which were the worst by a long way. I remember, back in the ’80s, we had to raise £2.40 to spend £1 in Bradford and send £1.40 back to the Treasury, and it did not get much worse than that, so I am not worried about the Liberal Democrats having only 57—or, soon, 58—Members, because two of us Liberals managed to stop Councillor Pickles slashing the education budget in the ’80s, although unfortunately a by-election and the lord mayor’s casting vote enabled him to do so the following year.

During the 13 years under Labour, additional funding went to the local authority and it was very welcome. Unfortunately, it was accompanied by obsessive control, bureaucracy, targets and the ring-fencing of funds, which would enable Ministers to issue press releases telling us how good they were and what they were doing for the people of Bradford. Building Schools for the Future was a colossal waste of public funds, and if we had been given only half that money to spend in our area on our priorities for schools, it would have been much better.

The cynical use of local services to win Government popularity reached shameful proportions with the free school meals handout and free swimming. It would have cost us 8 million quid to keep free school meals going the year after, and, although the shadow Secretary of State says that we did not turn that money down, how could we? That is how much it would have cost us to keep the service going, and it was pure political cynicism to make that offer leading up to a local election.

Similarly, the area-based grant and the working neighbourhoods fund were time- limited, and, although we got as much as we possibly could because we had things to do with the money, local education authorities invariably required that that short-term funding be added to the base. The position we were in meant we could stop the funding or add it to the base, but if we did not continue with it we would have been the villains of the piece, so invariably we did.

Year by year, the base grew and grew, and all the time we faced the relentless pressures of an ageing population, and all that that meant for increased social care, and the fastest growing school population in the country. In turn, there was budget creep: unsustainable budgets that got bigger and bigger. Between 2000 and 2008, private sector jobs declined by 7.5% and public sector jobs went up by 14%, and that could not be sustained.

Despite all that, over those 26 years the local authority survived. It got through, and it will get through this recession, too. The Secretary of State was absolutely right: we cannot rely on a salami approach any more. The truth is this—it is a secret, so please do not tell anybody else—of the £1.3 billion gross budget that we were spending, we had a furious argument every single year at budget time about a couple of million quid. That was what was really going on, rather than dealing with the structural changes that were required in the authority.

As someone said earlier, necessity is the mother of invention. We are responding positively in Bradford, including the leader of the Labour group who, after six years of self-imposed exile, is actively working as the leader of the council with all the other groups because he understands the severity of the problems that we face. I give him great credit for that. But—and this is the big “but”—we cannot turn the tanker around in a short time. When we are faced with reducing £60 million on a net budget of £450 million, it is not about a planned, structural, cultural local authority change contributing to the deficit reduction programme; it is simply reckless, economic vandalism. That is what we face.

I do not know about other hon. Members, but I have detected a shift tonight on the subject of the front loading. I get a feeling that something has been said and there is something in the air. People might ask, “So why on earth are you making all these comments and raising these concerns?” I would say to them that that is what we have been given to work on and what the directors of finance across the country have been told, and they are acting on it. That is the point I am trying to make. We knew this was coming and we have been told how severe it will be, so we are now making decisions and cutting our budgets. The decisions we are making are not long-term, rational, objective assessments; it is simply panic. We are saving £1 million a month on the vacancy freeze. That is very welcome in terms of helping us with the budget, but it is arbitrary and has not been planned. Such an approach is salami slicing of the worst possible kind and it cannot go on because people will be affected by it.

We need to give local authorities time. They are rising to the challenge, but they need time to achieve what we are asking them to achieve, and we need to work with them. Despite what will happen later, if there were a free vote in the Chamber tonight, I think that the majority of hon. Members would support the motion. What has emerged from the various speeches is a recognition that local authorities need time. I hope that in the winding-up speeches tonight from the coalition side, we are given a very strong positive indication about all the concerns raised on front loading and that we are told it will be abandoned.

20:58

[Nic Dakin (Scunthorpe) (Lab)]

I draw attention to my entry in the Register of Members’ Financial Interests. It is a pleasure to follow the hon. Member for Bradford East (Mr Ward) who praised my great friend Councillor Ian Greenwood, the leader of Bradford city council, for rolling up his sleeves to get on with the job. I recognise the great honesty of the contribution he has made tonight. In recognising that, the figures look—in his own words—a bit scary.

The cuts in local government spending announced by this Conservative-led Government are of unprecedented severity—27% in four years is a massive amount. As leader of North Lincolnshire council for six years, I inherited a council with the fourth highest council tax in the country. Through systematic and planned savings, the council’s budget had been cut by many millions by the end of my term of office. Council tax at band D was the average for England, and the Audit Commission identified North Lincolnshire as a beacon council, so I know it is possible to reduce spending while developing services.

Like my hon. Friend the Member for North Tyneside (Mrs Glindon), I recognise that innovation has been around for some time in local government. However, to do that creatively and effectively, budget reductions have to be systematic and planned. To cut budgets in a crisis is exactly the wrong thing to do. It leads to the wrong cuts, a lack of service continuity, and disastrous consequences for the organisation’s finances and for the services it delivers. We need look no further than across the Irish sea to see how true that is.

The Education Committee recently interviewed two heads of children’s services to see how it feels at the sharp end. In his opening question, the Chair asked whether the funding reductions made sense. Matt Dunkley of East Sussex county council, the vice-president of the Association of Directors of Children’s Services, answered thus:

“I think we all understand the imperative of the deficit reduction. I think our fears are, managerially, how it is being handled by the Department and how the settlement is being broken down, in terms of the different funding streams that affect us. We are fearful that a combination of front-loading of the reductions into year 1, and the way in which the different funding streams on which we are reliant are being cut at different rates over the four years…could lead to some local authorities having to make very large reductions in the first year of the four years of the settlement. That could have a knock-on effect in terms of the amount of redundancies they’d have to fund, which might produce some unintended consequences”.

Debbie Jones, director of children’s services for Lambeth, added:

“What I want to emphasise…is the front-loading issue. I think all of us have recognised the need to make significant reductions, but the important thing is that we essentially transform the way in which services are commissioned and delivered so you have a reasonable lead-in time. The impact of the front-loading, not just on our overall settlement but also on the grants that we have yet to know the detail of, means that we will have a very short time in which to make major decisions. That of immediate knee-jerk—obviously we’ll do our best to avoid it—could result in those unintended consequences, which could undermine the work that we’re doing in the future.”

That is what the professional leaders on the front line are saying about how this Government are going about their business. They are not whingeing and whining—they are professionals. To use the words of my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), they are getting on with the job. That is what professionals will always do, in my experience, when faced with some of the nonsense that we, the politicians, serve up from time to time. They will somehow make sense of the nonsense, and they will make it work, after a fashion. However, what they warn of we have a duty to listen to. They warn that these reckless cuts will lead to unintended consequences, which will impact on the lives and livelihoods of the most vulnerable. These reckless cuts will deliver the Prime Minister’s broken society, not his big society.

As the Tory peer and LGA chair, Baroness Eaton, said:

“the unexpected severity of the cuts that will have to be made next year will put many councils in an unprecedented and difficult position.”

We have heard how Conservative leaders and mayors in the north of England have echoed this in a chorus of concern. The chief executive of North Lincolnshire council agrees. Never before has the council in my area had to take an in-year cut in Government funding after it set its budget, as it had to do this year. The front loading of future cuts means a 10.4% reduction next year. Additional cuts to specific grants will exacerbate this further. It is small wonder that the council concludes thus:

“Revenue spending cuts in excess of £20 million over 4 years are on an unprecedented scale. There will be implications for all areas of council activity. While the council will try to manage as much of this as possible through efficiency measures, reductions in services and staffing levels are inevitable.”

For all the Tory talk of localism and devolving power to local authorities, the Tories are cutting local budgets harder than national budgets. Town hall spending will be cut almost three times more than that of Whitehall Departments—so much for localism. The cuts are front loaded so that the heaviest cuts fall in the first year, giving local councils almost no chance to plan where savings can be made. The cuts are too deep and too quick, putting front-line local services at risk. Many small businesses rely on contracts for local authorities. As my hon. Friend the Member for Lewisham East (Heidi Alexander) pointed out, cuts in local government funding will result in fewer contracts for the private sector, meaning loss of jobs and a knock-on effect for the wider local economy. It is little wonder that PricewaterhouseCoopers forecasts that for every job lost in the public sector, another will be lost in the private sector.

This timely motion gives all Members of the House the opportunity to listen to the people, to pause and to do the right thing. By voting for the motion, we are voting for localism, for small business and for local people. I commend the motion to the House.

21:05

[Angie Bray (Ealing Central and Acton) (Con)]

Hon. Members will be pleased to know that I will keep my remarks short.

Given where the country finds itself financially, it would have been strange if local government had been immune to the tough choices that the coalition Government have been forced to take to cut the deficit and to get the country back on track. Decisions on local government spending are indeed tough, with a 7.5% cut in spending each year between now and 2014. However, as many colleagues have said, the cut may well be lower due to other revenue streams.

Although the impact is painful, the coalition has taken decisions to make it as fair as possible. Councils up and down the land will be supported in freezing council tax in 2011-12 through additional funding equivalent to the revenue from a 2.5% rise in council tax. That honours a coalition agreement promise to freeze council tax, even in the face of the worst debt crisis since the second world war. It is also an essential ingredient of the coalition’s policy on fairness, because it helps the lower-paid and pensioners in particular, who have seen their council tax double since 1997. The average band D council tax bill is now nearly £1,500, which frankly beggars belief.

As with so many issues, we still do not have a clue how the Labour party would approach this difficult funding issue. It has to get over its denial about the financial problems that face this country. It continues simply to complain and scaremonger, yet it never tells us how it would deal with the problem, except to imply that somehow it would be able to do so without having to take any difficult decisions. More likely, it is not coming clean with us about the plans that we know it had, because it does not want to talk about them any longer. We are where we are because of years of overspending without a care in the world by the Labour party. Now the pain starts as we rebuild our finances. At least Government Members know what we have to do.

The most important reform that the coalition is introducing in local government is more localism. One way in which the Government are trying to alleviate the difficult measures is to free funding from being overly ring-fenced. That will allow local councils to use their revenue with much more flexibility, so that they can meet local needs in the way that they know best.

[Neil Carmichael (Stroud) (Con)]

The debate has focused on two issues. Obviously, the cuts are the primary issue, but there is a secondary one. Does my hon. Friend agree that the opportunities that the coalition Government are giving local authorities to be imaginative and even radical in reforming their services and their approach to local government will pave the way for exciting, diversified and genuinely local authorities?

[Angie Bray]

I thank my hon. Friend for that contribution. Of course, I agree that it is a great thing to get local authorities back to doing what they do best, which is to work closely with their local residents to ensure that they give them what they need.

As hon. Members have said, many local authorities across the country are considering how they can take out costs in their back rooms by working together to run services. My hon. Friend the Member for Halesowen and Rowley Regis (James Morris) mentioned Kensington and Chelsea borough council getting together with Westminster city council and Hammersmith and Fulham council to do just that. Those boroughs happen to make up my previous London assembly seat and they are all, I should add, Conservative-run. They are doing what local councils should be doing—making efficiency savings in bureaucracy where possible, rather than hitting front-line services.

My local, Labour-led council, Ealing, has been quick to announce plans for a range of cuts, including cutting day care centres, a child protection officer and more than 50% of park rangers. Enviro-crime officers are also to be cut, from 23 to 12, yet it is happy to find £3 million for new computers at the town hall and, quite disgracefully, it is to continue funding full-time trade union officials to the tune of £250,000 a year.

[Tom Blenkinsop]

Regarding non-statutory duties and youth services, about which we have heard from the hon. Members for Bermondsey and Old Southwark (Simon Hughes) and for Croydon Central (Gavin Barwell), would the hon. Lady like to condemn the Prime Minister, who is funding pilot schemes for big society youth projects in the summer with people who are not qualified in youth training?

[Angie Bray]

I am happy to take that point on board, but I am going to make progress.

The spending decisions that I mentioned are clearly not the priorities in which the people of Ealing are interested, and they really ought to be reconsidered. Unfortunately, I suspect that politics has played a large part in them. They were entirely avoidable, but the council hoped to make the coalition Government take the blame. I expect the public to be a little cleverer than that. They know, as we all do, that we are in a black financial hole because of the previous Labour Government, and my constituents will not be impressed by poor spending decisions that allow day care centres to be closed or park rangers to lose their jobs while full-time trade union officials are kept in cushy jobs in which they do nothing to support the local community. I will oppose the motion.

21:11

[Karl Turner (Kingston upon Hull East) (Lab)]

I am very grateful for the opportunity to speak in this debate, which is important because the subject affects my constituents particularly badly. I have enjoyed contributions from both sides of the House, and I particularly welcomed that of the hon. Member for Bradford East (Mr Ward). It reminded me of something that he said at the very beginning of the Parliament in a media interview: “It’s not about who you do the deal with, but about the deal you do”. I suspect that he is rather wondering what sort of a deal has been done now.

I also welcomed the contribution of the hon. Member for Brigg and Goole (Andrew Percy) about waste in local government, particularly when he referred to bureaucracy and the rule book on appropriate language to be used by councillors to council officers. He failed to mention that the other half of the Tory group on his council was accused recently of referring to a council officer as a “wonk” and a “foreigner”. Perhaps it would have been useful for him to have read that very rule book.

[Andrew Percy]

As my friend, colleague and near neighbour knows full well, the guide I referred to was for councillors in their dealings with the public. The corporate governance inspection recorded that it was Labour councillors who were bullying members of staff back in 2000.

[Karl Turner]

Of course, I disagree entirely. It was very recently that the leader of the Tory group was accused of the serious things I mentioned, and it would have been better had he read the rulebook.

As axes have fallen, local government has emerged as the indisputable loser from the Government’s austerity measures. Town halls across the country will feel the squeeze tighter than Whitehall Departments as the Government cynically try to devolve responsibility for the choices they have made and the mess they are creating. On average, local authorities will experience a loss of funding to the tune of 27% over four years, compared with 11% for Whitehall Departments.

Before I move on to specific objections, I should first like to discredit the myth that that situation was inevitable. It was not. There was an alternative, which, coincidentally, was the opinion of the junior partner in the coalition Government. It had the support of numerous Liberal Democrats who are now members of the Cabinet, and the Deputy Prime Minister deemed it simple enough for his 8-year-old child to understand. Slower deficit reductions—half the level over four years—as supported by the Labour party, would have mitigated the effect of local government cuts and protected the most vulnerable in our constituencies.

Cuts this size and this fast cannot be absorbed through recruitment freezes, removing natural wastage or service-sharing. Make no mistake: these cuts will impact on services and jobs. Across the country, local councils have already begun shedding staff and pulling vital front-line services. Council leaders, whatever their political persuasions, are trying to mitigate their political misfortunes, explaining that services will be hit and jobs lost, and even the Secretary of State admitted that, by itself, sharing services will not balance the books. Money allotted for highway improvement is being hit in Somerset, north Yorkshire and London, and support for battered women has been slashed in Buckinghamshire. Eligibility for social care is being tightened, £311 million of grants from the Department for Education have gone, and youth services are being put at severe risk.

In my constituency, residents have been hit particularly hard by cuts to the housing market renewal programme, affecting Hull’s gateway housing regeneration scheme. The speed at which Government funding has been withdrawn has left many living in derelict houses, experiencing damp, flooding and an increase in theft. I have written to the Secretary of State to invite him to see the result of his policies, but not surprisingly he has yet to reply. It is perhaps no wonder that he has not afforded me the courtesy of replying to my invite. My constituents are left in real desperation. Cuts to these areas do not just end with a fall in service provision. They begin a vicious cycle of their own: as jobs are lost and unemployment increases, dole queues get longer and longer. The Local Government Association has already revised up its estimates of job losses to 140,000 this year and predicts costs associated with these redundancies could be as much as £2 billion. However, money provided by central Government to help with the cost of job cutting amounts to only £200 million.

I come to the crux of the motion. It is not just the depth of the cuts that is damaging, but the speed. The Government’s desire to rush local authorities into making cuts now to make sure the damage is done well before the next election is a worrying and short-term decision based entirely on political objectives. The Secretary of State can scream from the rafters that the accusation of front-loading is fiction, but the evidence is firmly against him. The Local Government Association has estimated that the cuts will fall heaviest in the first year, with an 11% loss in 2011-12.

The Government may talk a good game, but they certainly do not play one. Let us consider, for example, the Secretary of State’s vision for local authorities. He claimed that they should use cuts as an

“opportunity to completely rethink everything they are doing, creating a modern, flexible and innovative council.”

That is certainly a laudable sentiment, but in practice he is forcing local government to make cuts almost immediately, allowing no time for planning or strategy. The opportunity that he speaks of will last for the blink of an eye.

As well as going too far, too fast, the cuts are unfair. Despite claims from Government Members that they would aim for fairness and that we are all in this together, the effect of these cuts is highly disproportionate, hitting the worse-off hardest. Even the Minister admitted:

“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]

Unfortunately, figures from the Department for Communities and Local Government bear that out. The councils worst hit over the four-year settlement, including my constituency, are among the 10% most deprived areas in the country.

This Government say one thing and do another. Measures involving jobs, services, front-loading and unfairness are all being undertaken using the language of localism. The Government are front-loading cuts in local services to ensure that, come the general election, the massacre will be over. They are making councils take responsibility for the cuts locally so that they do not have to account for their irresponsibility nationally. They are feathering their own nests while pillaging constituencies such as my own. This Government claim that we are “all in this together”, so I ask the Secretary of State if he will please visit my constituency, along with housing Ministers, to see the carnage for themselves.

21:20

[Andrew Bingham (High Peak) (Con)]

I will be brief as I believe that one more Member wishes to speak in the next 10 minutes. I have had the privilege of being a High Peak borough councillor for 11 years, and I remember the first four years, when the council was under Labour control. Labour Members tend to wax lyrical about the past, but during those four years, when we were led to believe that money was plentiful, the Labour-controlled council managed to put the council tax up by 19% in a single year. The increase averaged more than 9% a year over four years.

In 2003, we had a strangely prescient situation in which a Conservative-Liberal Democrat coalition ran High Peak borough council, but even then we were squeezed by the Labour Government, with small settlements and extra duties. We were told to take on licensing, for example, but given no money to do it. We had to find that money ourselves. The hon. Member for Lewisham East (Heidi Alexander), who is no longer in the Chamber, made an accusation about us shifting the blame for taxation on to local authorities. All I will say to that is: they should know, shouldn’t they?

The council was then faced with comprehensive performance assessments, and I remember officers focusing on that week after week, month after month, and carrying out mock CPAs to get the necessary excellent rating in order to free us a little more from Government interference. That took their minds off delivering the services that we were there to deliver. It was ridiculous, and we need less of that. We still managed to set a low council tax, however, and in 2007 the Conservatives took control of the council.

Members who have been in the Chamber for most of the debate will have heard me describe our strategic alliance with Staffordshire Moorlands. We have achieved more than £2 million of savings, which can go to our residents, although many of those measures were opposed by the Labour group. The two councils now share environmental health, ground maintenance, property management, communications, human resources and finance—the list goes on. We have all heard of other councils sharing in this way, but we were one of the first to do it. I urge Members to come to High Peak borough council and learn from us how it was done. We might make a small charge, but they would be very welcome if they would like their councillors to learn about this.

In future, we need less Government control. We have seen the regional spatial strategies going, although there are some difficulties involving legal challenges and we need to move that along faster. We have heard the Opposition say that they did not know what cuts were coming, despite their having announced them in their own pre-Budget report. Last year, however, the opposition councillors in High Peak questioned our medium-term financial strategy because we were not budgeting for deep enough cuts. So, on the one hand, the Opposition say that they do not know about the cuts but, on the other hand, they behave in completely the opposite manner.

The money that we are giving to local authorities now will be a lot freer, because there will be less ring-fencing, and freer money goes further. Ring-fenced money is harder to use, and it is not put into the right areas. Labour Members are in denial; they have been since May. Perhaps it was the sun that got to them, I do not know, but they would have been forced to make cuts and savings, had they won the election. Thankfully, they did not win it, and they have now resorted to nothing more than scaremongering.

21:23

[Graham Jones (Hyndburn) (Lab)]

Given the short amount of time left, I shall raise just a few brief points. I want to mention the new homes bonus, a suggestion that could save money, the big society, and residualisation in east Lancashire, which is an important issue in my constituency. I also want briefly to touch on police community support officers.

My constituency is suffering some of the biggest cuts. We are facing 27% cuts across the board, but we are waiting for the actual figures. I am surprised that the Minister will not confirm those figures today. My hon. Friend the Member for St Helens North (Mr Watts), who is no longer in his place, mentioned a report produced by the all-party parliamentary group on the special interest group of municipal authorities—SIGOMA. It stated that Hyndburn was ranked as the 40th most seriously hit area, facing between 30% and 38% cuts. These can have a cumulative effect, and similar examples have been raised by other Members today.

The new homes bonus is frequently used by Ministers as a method by which councils can run for financial sanctuary, but it will have no impact on constituencies such as mine, where there are some 2,500 empty properties. Netting off demolitions will hit hard any areas where there is an over-supply of housing. This policy is a bit like throwing a drowning man a medicine ball.

Let me make some suggestions. Conservative Members say that we have no suggestions, but my right hon. Friend the Member for Salford and Eccles (Hazel Blears), who is not in her place, suggested more flexible use of the business rates, which the Secretary of State touched on earlier. Let me give him another suggestion. If he stopped scratching his head and listened to me, he might learn a thing or two. Hyndburn council calculated that removing the 50% council tax discount on empty properties will raise £660,000—an enormous sum for a district authority. At the moment, this money is clawed back through the revenue support grant deduction. It needs to be looked at. It is interesting to note that The Independent on Sunday reported that the Liberal Democrats were looking at similar initiatives—discounts and removal—for second homes.

Turning to the big society, it concerns me that the Government believe that we are moving towards such a society. I cannot see it. Let me provide an example. My local authority provides £57,000 for citizens advice bureaux. If we face cuts of between 30% and 38%, I cannot see how that is likely to continue, yet this is a time when citizens advice bureaux will see an increase in the number of people coming to see them. This will mean an increase in the work load at a time when Citizens Advice will be laying off staff. It is also affected by many other streams of direct Government funding, which are also being cut. It is obvious that there are going to be real problems. I do not think that the Conservative council of Hyndburn and Rossendale has an appetite for maintaining such funding. It is going to set a 0% council tax—a big issue, as that is going to hit the big society even harder. Many voluntary groups rely on this funding, and I cannot see how they are going to survive. Thanks to the cuts, we have already lost one dial-a-ride minibus, and I imagine that the disabled service will be removed altogether unless we see some sort of public support.

These huge cuts have a cumulative impact, so there is a growing concern in Pennine Lancashire about what I would describe as the residualisation of poorer communities. Ministers need to be aware of that. Indeed, evidence is now emerging that while populations in these areas remain relatively stable, the number of those in higher-income brackets is declining, along with those who have better education and better employment prospects. This is countered by a growth in the number of poorer, lower-income households and those with lower levels of educational achievement. These populations are, by their nature, often more dependent on public services. We therefore see self-reinforcing patterns starting to build up as a result of these cuts.

This is a crucial issue. The latest rankings for the index of multiple deprivation show that right across Pennine Lancashire, with the exception of Ribble Valley—I notice our Deputy Speaker has left—there has been a marked fall as the effects of residualisation take hold. There are real fears that the outcome will be a “ghettoisation” of parts of east Lancashire and other parts of Britain, thanks to a Government focusing solely on areas that can prosper economically rather than getting to grips with the needs of all communities.

Finally, let me touch on policing. On top of all the other cuts I have mentioned, policing is going to be cut. Police officers in my area believe that, without the extra staff, crime will rise. The police cuts are ill considered. Police community support officers are part-funded by local authorities; they tackle in partnership a wide range of social problems. No assessment seems to have been made of the wider impact of cutting PCSOs in areas where local authorities work in partnerships. I will stop there and allow the Front-Bench teams to conclude the debate.

[Joan Ruddock]

On a point of order, Mr Speaker. I think you will know that I have been in the House long enough to take the rough and tumble of parliamentary debates, but earlier today, in response to my intervention, the Secretary of State made a remark about an hon. Lady’s “champagne lifestyle”, which appeared to be directed at me. I found that really offensive and rude. Will you advise me, Mr Speaker, on whether I could expect that remark to be withdrawn?

[Mr Speaker]

Let me say three things to the right hon. Lady. First, good temper and moderation in the use of parliamentary language are always to be encouraged. That principle is set out clearly and explicitly in “Erskine May”, which is our guide. Secondly, I had the privilege of serving on the International Development Committee with the right hon. Lady and travelled to a number of places around the world with her and other colleagues, and I cannot recall her consuming champagne at any stage. Thirdly, let me simply say that my distinct recollection is that the right hon. Lady is a modest person, with very little to be modest about. I hope that that is helpful to her and to the House.

21:30

[Barbara Keeley (Worsley and Eccles South) (Lab)]

I hope that the words that you have just uttered, Mr Speaker, will have an impact on Government Members, because there has been quite a lot of rowdiness today. I also think it worth saying that some of the ways in which Members are addressing female Members does them no credit at all.

We have had a good debate, featuring 25 Back-Bench speakers. It was polarised—as well as being, as I have said, a little rumbustious at times—but then the Government’s cuts are polarised in terms of their impact on different parts of the country.

The Secretary of State talked earlier of “Life on Mars”, and of returning to the 1980s. That is not the best theme when we are discussing cuts that will restrict and reduce services, damage communities, and put more than 100,000 local government staff out of work. The Secretary of State missed the contribution of the hon. Member for Bradford East (Mr Ward), who did not seem to feel that the 1980s were a great period. As for Government Members who thought that those were halcyon days in some respects, let me remind them of what was said by my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh): they ain’t seen nothing yet. That was the most difficult and damaging decade for communities. I became involved in politics, and stood for election as a councillor in Trafford, because of the 1980s and Thatcherite policies, and I am sure that many of my right hon. and hon. Friends did the same.

The Government have made choices about the severity and timing of cuts in local government budgets, but they are the wrong choices. The cuts are unfair, unreasonable and unmanageable. They are unfair because they hit the most deprived areas hardest, and will have an impact on the most vulnerable people. Affluent areas will not be hit by such deep cuts. Wokingham borough council, the least deprived unitary authority in England, will undergo cuts estimated at just 2.3% next year. The most deprived unitary authority in the country, Liverpool city council, is the hardest hit, facing estimated budget cuts of 12.3% next year alone.

Many of the excellent speeches that we heard, particularly those of Labour Members, were on that theme of unfairness. My hon. Friend the Member for Denton and Reddish (Andrew Gwynne) found it difficult to see any fairness in the cuts. He spoke of the 800 staff cuts with which his local authority is threatened, and of his concern about the impact on the voluntary sector. My hon. Friend the Member for North Tyneside (Mrs Glindon), who was a councillor for 15 years, told us that the Conservative mayor had urged Treasury and other Ministers to think again about the speed of their cuts. She said that she had asked officials to spread the reductions more evenly over the four years of the spending review.

My hon. Friend the Member for Blackpool South (Mr Marsden) talked about the help that his Conservative-controlled council had been given over issues of transience and deprivation, and his concern about the cuts in area-based grants. He spoke of the impact of cuts of £32 million, and said that the Conservative council leader had urged the Government to reconsider their approach—particularly their approach to front-loading, which would produce cuts of between 11% and 16%.

My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) also talked about unfairness, focusing on the polarised nature of the Government’s approach. Estimates show that the most deprived areas will be hit hardest by the cuts, and that the least deprived will be least affected. My hon. Friend the Member for Barrow and Furness (John Woodcock) said that the Government should not adopt an approach that would render the funding of local areas blind to the needs of those areas, because that was neither fair nor progressive. My hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) talked about the speed of the cuts and the front-loading. She was rightly concerned about the impact on Liverpool city council, which, as I said earlier, is the most deprived unitary authority in the country. She was also concerned about the impact on jobs and, in particular, on small business.

The fear has been expressed that local authorities may be forced into damaging crisis measures. The Secretary of State set out what he expected from councils when he said that further financial freedoms announced for councils would mean that they could better protect front-line services such as care for the elderly, but last week Birmingham city council proposed restricting funds for social care to those who had been assessed as “critical”, the highest possible level at which to set eligibility. People with substantial or moderate needs would be “signposted” to private and third sector providers.

Cuts like those being suggested by Birmingham council will undoubtedly lead either to a greater reliance on unpaid family carers or significant care needs simply being unmet. My hon. Friend the Member for Lewisham East (Heidi Alexander) talked eloquently about how difficult she found it as a councillor to consider raising eligibility criteria, and in the end she and her colleagues did not do it. They are to be commended for that.

Birmingham council, which is run by the Conservatives and Liberal Democrats, has claimed that its strategy on adult social care is part of its version of the big society. As my hon. Friend the Member for Stockton North (Alex Cunningham) said, the third sector is the big society; forcing unpaid family carers into a much heavier caring work load is not the big society.

The Government’s cuts are unreasonable with a lot of changes being made in a very short time scale, and there is insufficient support for councils to pay inevitable redundancy costs. A number of Members have raised that issue. The Local Government Association estimates that next year councils will be facing 11% cuts in their formula grant and many councils will also lose area-based grants, which were designed to tackle poverty and deprivation. Many Labour Members have talked about the impact of those changes on their communities as specific grants that had their own targeting based on need have now been rolled into the main formula grant. London Councils says the way this works will cause London’s share of these grants targeted at need to evaporate. It has said that the distribution mechanism used by the Government is flawed and generates perverse and unfair outcomes. The Government could mitigate the impact of the changes by setting funding floors at the highest possible level, and we urge them to do so.

The hon. Member for Bermondsey and Old Southwark (Simon Hughes), who is not in his place, supported setting funding floors at the highest possible level. [Hon. Members: “Here he is.”] He is here now; welcome. The hon. Member for Bermondsey and Old Southwark, who is now in his place, also put forward the LGA’s five recommendations: to smooth out the front-loading so as to lessen the impact on deprived areas; to increase capitalisation to what councils need; to account for missing grants; to review councils’ ability to recover costs through fees and charges, which several Members have talked about particularly in respect of burial charges; and to avoid any unfair distribution of grant. I must say, however, that although the hon. Gentleman put those points forward, they were also all put forward by the shadow Secretary of State, my right hon. Friend the Member for Don Valley (Caroline Flint), in her excellent opening speech.

Many Labour Members have talked about the fear of job cuts, which, to their credit, some Members on the Government Benches said they regretted. It is time to think not only of the job losses in local government, but the knock-on effect in other sectors. Today we have heard that recovery in the construction sector is stalled until at least 2013, given that construction work from the public sector is set to fall by 17%. My hon. Friend the Member for Stockton North talked about the loss of construction through the cancellation of Building Schools for the Future and the planned local hospital. The chairman of the UK Contractors Group confirmed this point when he said:

“About 40% of our business comes from the public sector and so construction will not be immune from these decisions”

in local government.

My hon. Friend the Member for Liverpool, Walton undoubtedly remembers a similar impact on the construction industry in the 1980s—the torrid decade of Tory rule as he calls it, which he said were devastating for Liverpool.

Losing a job is devastating, and the cuts will clearly lead to substantial reductions in staffing across the local authorities affected. The LGA estimates that 140,000 local authority jobs will be cut next year, but as we have heard from a number of Members, councils will not be able to meet the capital costs of those redundancies because the £200 million currently set out by the Government to pay the costs of redundancy is simply not sufficient: if 140,000 jobs are indeed lost, it amounts to less than £1,500 per redundancy. As we have heard, councils may need up to £2 billion next year, 10 times more than the provision made by the Government. We say councils should be given the flexibility to fund those redundancy costs from capital, as they need.

The Government’s cuts are not only unreasonable; they are also unmanageable. A number of councils believe that they will not be able to set a balanced budget given the front-loading of cuts next year. My hon. Friend the Member for Scunthorpe (Nic Dakin) spoke very well about that and possible unintended consequences. The Association of North East Councils, a cross-party group, has called the Government’s proposed cuts to local government “undeliverable for some” councils.

The Secretary of State has not been willing to admit that the cuts are front-loaded, despite a number of attempts to draw him to do so today, but the reality is that many councils will face budgets cut by 14, 18 or even 20% next year. Many Labour Members have discussed that issue and, as my right hon. Friend the shadow Secretary of State said, the president of the Society of District Council Treasurers has called the front-loading disastrous. The leaders of the Local Government Association called on the Secretary of State to mitigate the front-loading of cuts, as it would

“bear disproportionately on local communities and vital frontline local authority services”.

Indeed, the Conservative leader of Bury council said that

“it is almost impossible to absorb such vast figures in the time that we have available”.

Councillors not having any time available to them has been a key theme of our debate.

Many Government Members, including the hon. Members for South East Cornwall (Sheryll Murray), and for Meon Valley (George Hollingbery), have talked about introducing more innovative ways of dealing with the cuts, but Labour Members say that the severe and unexpected front-loading of the cuts will mean that councils do not have the time to do that. Shifting to shared service models, renegotiating long-term contracts and working with other sectors as providers are major changes. They take time and money to implement and that time is just not there. My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) made that point most eloquently. It was also made by the hon. Member for Bradford East, who said that the front-loaded cuts were “reckless economic vandalism” and that cutting required time.

In dealing with these unfair, unreasonable and unmanageable cuts, councils are not assisted by the mixed messages coming from Ministers. The Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) told the Hackney Gazette:

“Local authorities have been aware for some time that funding reductions were imminent and should have been looking at…reducing budgets next year”.

Many Government Members pursued that same theme today.

At the same time, other Ministers are calling on councils not to make redundancies or to plan cuts to services. The Deputy Prime Minister has criticised councils for acting now, saying that

“they shouldn’t immediately start issuing redundancy notices for savings that they can phase in over four years”.

On adult care, the Minister responsible for care services has said:

“There is no justification for local authorities to slash and burn or…to tighten eligibility”.

When asked about the impact of cuts on voluntary organisation funding, the Minister responsible for decentralisation said:

“I expect local government not to draw up the drawbridge, but to treat voluntary organisations fairly and…to allow them greater access”.—[Official Report, 25 November 2010; Vol. 519, c. 446.]

When asked about the effect of the spending review on libraries, the Under-Secretary of State for Culture, Olympics, Media and Sport, the hon. Member for Wantage (Mr Vaizey), said:

“Local authorities have a statutory duty to provide a comprehensive and efficient library service. I shall be writing to all local authorities this week to remind them of that.”—[Official Report, 29 November 2010; Vol. 519, c. 514.]

Today, the hon. Member for Bermondsey and Old Southwark said that councils must not pick on the voluntary sector.

It appears that Ministers and some hon. Members do not want councils to cut areas for which they have responsibility or just feel that they can avoid doing so. As we have heard in this debate, Conservative council leaders and Lib Dem councillors up and down the country feel the same way, and they have been pressing their case to the Government. But up and down the country there are reports of councils having to do the opposite of what they are told by this Government. For example, Conservative-run North Yorkshire county council, which plans to close more than half its 42 libraries and two thirds of its residential care homes, cut £10 million from the highway maintenance, road safety, countryside and arts budgets. It also cut bus subsidies, even to rural areas. Ministers are being totally unrealistic about the problems that many councils now face. It is clear to us that the Government are not listening to them. Labour Members are listening, and I urge Members on both sides of the House to support the motion, including the hon. Member for Bradford East and his colleagues.

21:45

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

This has been a robust debate and is none the worse for that perhaps. The subject is important and there are rightly strong views on it. Many Members have spoken and I shall start by apologising in advance if I do not manage to mention individually the speech of every one of the 25 Members who spoke. I hope, however, that I can pick up on certain themes.

There have been some considered and thoughtful speeches from hon. Members on both sides of the House. Issues of genuine concern have been raised by Members on both sides and I shall come back to those in a moment. I regret to say that, in some cases, however, the seriousness of the debate has not been served by the simplicity and shroud-waving and by some of the clichés that have been used as Members have injected more and more purple passages. That does not help in dealing with this serious matter, because the Government have never made any secret of the fact that the circumstances facing local authorities are difficult. We have been honest about that and it is to the credit of my hon. Friends from the Liberal Democrats that, when they came into government, they had the courage to recognise that the circumstances facing the country were grave. They deserve better service than the carping from Opposition Members who have not yet had the decency to admit their responsibility for the mess that the country is in or to come up with a constructive alternative.

Let me say to the hon. Member for St Helens North (Mr Watts) that he need have no fears about my health. I would fear, however, for the health of the nation’s economy if he were to be let loose, on the basis of what he and his right hon. and hon. Friends have done already.

It is against that background that it is necessary for us to take difficult and regrettable measures. I spent 16 years in local government, initially during the time when Denis Healey was going to the IMF and Jim Callaghan was telling local government that the party was over. I shall not brook any lessons from Opposition Members about the effects of Labour economic mismanagement on local authorities. Yet again, my hon. Friends and I find that we have to pick up the pieces. I accept that there are tough decisions, but they have come about because of the wreck and the train crash that the previous Government made of the economy.

Let me consider some of the propositions in the motion. There is a criticism of the percentages, but it starts from a basic error. It complains that

“councils will lose, on average, 27 per cent….compared to 11 per cent., on average, for Whitehall departments”

There is a sleight of hand in that, because the average figure includes the protected Departments. Unless Labour is going to tell us that it was not going to protect those Departments, the second line of its motion does not compare like with like. Frankly, it is intellectually questionable on that basis. The motion

“regrets the frontloading of reductions”,

but sadly, because of the extent of our economic inheritance, there should be a swift move to deal with deficit reduction. All people have to work together in that.

Ironically, we see from the Treasury proposals left behind by the previous Government that they intended to make cuts of 14% in the first year and 11% in the second year. That might be a type of front loading. I do not think we will take any lectures on that from Opposition Members either.

Let me turn to the question of the unexpected severity. My right hon. Friend the Secretary of State pointed out that the previous Chancellor and the previous Prime Minister already made it clear that should Labour—unfortunately for the country—have been returned at the election, there would have been significant cuts. We have simply been honest about it and shouldered the burden that they neglected to take on board. We do not need to take any lessons there.

[Karl Turner]

Will the Minister give way?

[Robert Neill]

I shall, because the hon. Gentleman has been very vocal all night.

[Karl Turner]

It seems rather contradictory for the Minister to say on the one hand that we did not have a plan to reduce the deficit and on the other hand that we seemingly did. Which is it? Come on, Minister.

[Robert Neill]

The hon. Gentleman gets it right. Seemingly none of us knows what Labour’s plan was and the Leader of the Opposition does not know either. I assume that the hon. Gentleman will progress rapidly to the Front Bench, as he is as vague on policy as the leader of his party. If that is the best the hon. Gentleman can do by way of intervention, I suggest he saves his knees the trouble in future.

May I just—[Interruption.]

[Mr Speaker]

Order. Will the hon. Gentleman resume his seat for a moment? It is always a pleasure to listen to him, but he is swivelling and perambulating. I want to hang upon his every word; he must address the House.

[Robert Neill]

I shall do my best, despite the noise.

What we have seen today is an exhibition of wriggling by the Opposition. They have failed to take on board serious concerns raised by hon. Members. Reference was made to my hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes)—[Interruption.] I was actually looking at you, Mr Speaker; I think that is courteous too. Reference was also made to my hon. Friend the Member for Bradford East (Mr Ward). Hon. Members have made serious points. The need for deficit reduction does not brook significant delay, but fair points have been made about it being appropriate to look not just at formula grant but at other spending powers available to local authorities. My right hon. Friend the Secretary of State has indicated that we are continuing to do that. We have taken steps to roll more grant into the formula grant, so the arguments that were made on that issue do not sensibly contrast like with like.

We have sought to give more flexibility in these undoubtedly difficult times by ending the ring-fencing of all revenue grants from 2011-12—something that the Labour Government never got around to doing. We are including single, non-ring-fenced, early-intervention grant worth about £2 billion. We are significantly simplifying and streamlining grant funding by rolling about £4 billion of grants in 2010-11 into the unhypothecated formula grant and reducing the total number of grants from 90 to 10. All those measures are designed to bring much greater transparency, as hon. Members on the Government side have pointed out. Despite their 13 years in office, the previous Government neglected to do that, so we need not take lessons from them on fairness or transparency.

As the Secretary of State has indicated, we are continuing the system of floor protection, which will help the most vulnerable authorities. That degree of ring-fencing, plus the other, greater freedoms that will be given in the decentralisation Bill that will be introduced shortly, will significantly assist local authorities in directing their resources to the most vulnerable. The fact that resources are limited is entirely the responsibility of Opposition Members rather than Government Members and the Opposition should never seek to wriggle out of that.

Let me congratulate one or two hon. Members in particular. My hon. Friend the Member for Meon Valley (George Hollingbery) made a particularly thoughtful and considered speech. He talked about the inevitability of floors and ceilings in the current system and the fact that there are real concerns in shire areas as well as urban areas. Any Government have to carry out a balancing act and that is what we seek to do. He and other hon. Members rightly referred to the need to move away from a formula that is past its sell-by date. Unlike our predecessors, this Government have grasped that nettle and committed to a swift review of local government resource in the first six months of next year.

My hon. Friend the Member for Bermondsey and Old Southwark made fair points on behalf of London councils and the Local Government Association. The Secretary of State has met LGA representatives, and let me tell the hon. Member for Stockton North (Alex Cunningham) that I am happy to meet his fire authority; I have met a number of others already. We are protecting fire services, which are getting a lesser degree of reduction, and the profile is different, so steps are being taken in that regard. I will happily meet any authority that seeks to discuss these issues with me.

My hon. Friend the Member for Halesowen and Rowley Regis (James Morris) made an exceedingly well informed and powerful speech. He talked about the need, at times such as these, to move to greater transparency. It was pretty telling that certain Opposition Members rather jeered at the mention of the £500 in relation to transparency. That shows a patronising attitude towards putting ordinary people in the driving seat. Perhaps that is the difference between the Government and the Opposition on this issue.

My hon. Friend the Member for Croydon Central (Gavin Barwell) carried out a comprehensive demolition job on the speech by the shadow Secretary of State, the right hon. Member for Don Valley (Caroline Flint), and the entire proposition behind the Opposition’s motion. The previous Government were going to cut, and they would have cut as deeply. They were going to eliminate the deficit; the argument was over timing. The state that we discovered when we came into government meant that swift measures were necessary. To pretend otherwise is to behave like the people who set fire to the house and then blame the fire brigade when it comes in to put the fire out. The intellectual bankruptcy of the Opposition is shown by the approach that they have adopted to these matters.

I say to the hon. Member for Mitcham and Morden (Siobhain McDonagh)—whom I have known in London government for a long time—yes, I accept that there are councils of all political complexions trying hard in difficult times. My own council is doing so, as is hers. Equally, she will understand that, despite the sympathy that we have for those difficulties, as anyone in the business world will tell her, it is often best and most sensible to take steps towards restructuring at an early stage. That is particularly appropriate in the case of local authorities with a full range of functions. There are good examples not only in London, but across the country of local authorities making real structural and operational change. That needs to be done quickly.

I appreciate the point made by a number of hon. Members about capitalisation. I understand what is said, but it should be remembered that we are making £200 million available for non-equal pay capitalisation. Capitalisation is an exception to the normal accounting processes. Because capitalisation is permission to borrow, that ultimately has impacts upon revenue spend because it has to be paid back. It must therefore be strictly controlled. Although I understand that councils will inevitably say they want more, Government must be realistic and set limits to an exception to the normal process.

That we are not being dogmatic is reflected in the fact that we have adopted a different profile in relation to fire authorities, because experience shows that it takes single-purpose authorities longer to reconfigure their working arrangements than those that have a range of purposes which can be more effectively shared. We have been sensible and proportionate in our approach.

The Secretary of State stressed—I hope Members from all sides will take this on board, as there seemed to be a degree of consensus on the matter—that it is important that local authorities do not resort to the old-fashioned way of salami slicing and, in particular, cutting grant to the voluntary sector. That is usually important. We will fail if local authorities go back to the tried old ways of doing things. We want to encourage them to do otherwise.

That is why, in the localism Bill, we will establish new rights for voluntary and community groups to deliver local services. That is why the Government have created a transition fund of £100 million to be spent in 2010-11. It will support the voluntary and community sector during the first year of the spending round. Through the localism Bill we will also give voluntary and community groups the right to challenge local authorities where they believe that they can run services differently or better. There is a raft of measures to support the voluntary sector, none of which was adopted by the previous Government in their 13 years in office—another example to demonstrate why we need take no lessons.

[Hazel Blears]

Will the Minister give way?

[Robert Neill]

To the right hon. Lady I will always give way.

[Hazel Blears]

I thank the right hon. Gentleman. Does he acknowledge that the gap in voluntary sector funding is likely to be in the region of £3 billion as a result of local government cuts, and his £100 million transitional fund is a drop in the ocean?

[Robert Neill]

rose—

[Mr Alan Campbell (Tynemouth) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

21:59

Division 144

Ayes: 197

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Labour: 191
Plaid Cymru: 2
Democratic Unionist Party: 1
Alliance: 1
Liberal Democrat: 1

Noes: 316

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Conservative: 273
Liberal Democrat: 42

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

On a point of order, Mr Speaker, the next motion on the Order Paper is about the time the House will have to debate university tuition fees, which is a huge issue for students and their families in this country. In 2003, the White Paper was published a full year before the vote, and in 2005, whether some of us liked the policy or not, the Government put their proposals to the general public at an election. In contrast, this year nobody voted for these plans and we have been told that we have only three hours for debate and no time for discussion of whether that is a proper amount of time for the House. Mr Speaker, could you advise us how the House can place on record its unease about how the vote is, frankly, being rushed through, and how coalition Ministers are running scared of proper debate and examination of their plans?

[Mr Speaker]

The short answer to the hon. Gentleman’s inquiry about how best he can register his concern is that, as I think he knows, he has just done so. It is very clearly on the record. As a very experienced Member of this House, he will also be aware that the form of such a motion and the question of whether it is debatable is not a matter for the Chair. However, the hon. Gentleman has registered the point and I hope that he feels pleased to have done so.

[Greg Mulholland (Leeds North West) (LD)]

Further to that point of order, Mr Speaker. May I ask the Chair how much time Back-Bench MPs will get to speak in the three-hour debate on Thursday? That is an issue of huge concern to many hon. Members, who feel that there is insufficient time to debate a matter of such huge importance to ourselves and our constituents all round the country.

[Mr Speaker]

The short answer to the hon. Gentleman is that he can ask me how long there will be for Back Benchers to speak—proof of that is that he has done so—but I am afraid that I am unable to give him an answer to that question. What I can say to him is twofold: first, as he knows, I am always keen that Back Benchers in this place should get the maximum opportunity to put their case; and secondly, the Leader of the House and the Deputy Leader of the House are both present, fortuitously or otherwise, and they have heard the hon. Gentleman’s point of order.