Local Government Funding: North-East

Debate between Lord Beamish and David Amess

Tuesday 1st March 2016 Westminster Hall

[Sir David Amess (in the Chair)]

Order. Before the hon. Gentleman responds, I remind the House that three hon. Ladies still want to speak, as well as the Opposition spokesperson and the Minister who will respond. The debate finishes at 4 o’clock, so I hope that colleagues will bear that in mind.

[Mr Kevan Jones]

My hon. Friend the Member for Gateshead (Ian Mearns) makes a pertinent point. We will end up with councils that deliver core statutory services, and even then they will be under pressure.

When the right hon. Member for Brentwood and Ongar (Sir Eric Pickles) was Secretary of State, he argued that somehow we could make the savings by having fewer pot plants in council departments, or by cutting staff numbers. I must tell the Minister that every council in the north-east has made back-office efficiencies. That will not enable them to meet the figures. For example, from 2011 to 2020 Durham will have lost £288 million from its budget. It is ludicrous to think we can make that up. I am sorry that the Secretary of State is not here; previously he has accused councils of hoarding large balances, but that is a way of diverting attention. I will explain the situation in Durham. It has £220 million in reserves. However, only £30 million of that is actual reserves, in the sense of the 5% that, when I was in local government, local councils needed. The rest is allocated for other things, such as redundancies and things that will take place against a budget of more than £865 million. Let us knock on the head the nonsense that northern councils are awash with large reserves. As my hon. Friend the Member for Darlington demonstrated, they are down to the bone. The other thing is that reserves can be used only once. The Government’s idea about a way of somehow mixing revenue and capital is economically illiterate.

I want to finish on devolution, because we will no doubt get a load of guff from the Minister about it. The devolution being put forward for the north-east is a devolution of responsibilities without the cash to go with it; £30 million is on offer for the north-east so-called mayoral model. If the cuts to public health funding go forward as predicted, Durham alone will lose £20 million a year.

I noticed last week that a Conservative, Mr Jeremy Middleton, announced his candidacy for mayor of the north-east. Strangely, he said:

“I won’t be asking people to vote for me because I’m a Conservative. I’ll be asking them to vote for me because I’m the right man for the job.”

I had a look at his website this morning, and he has also said that through negotiation with Whitehall he will deliver

“a fair financial settlement with similar public funding per head as Scotland”.

I challenge him to state why he has sat quietly for the past six years without saying a single thing about local government finance being butchered in the north-east. He is a friend of the Chancellor, a former Conservative candidate—he thankfully failed in the by-election against my hon. Friend the Member for Hartlepool (Mr Wright)—and has been an apologist for this Government. I ask the people of the north-east to remember that when and if we actually get this ludicrous situation with a mayor.

I am fully supportive of the idea of devolution, but devolution of responsibility without the funding, which is what this is, is not the way forward. Councils in the north-east are facing a crisis and there is only one explanation. It lies with the Government who are protecting their own areas in a party political way while not giving a damn about Labour-voting areas in the north-east of England.

[Sir David Amess (in the Chair)]

Order. I am having to impose a time limit of three minutes, which is unsatisfactory. I ask colleagues to resist making interventions.