Stronger Towns Fund

Lord Kennedy of Southwark Excerpts

Tuesday 5th March 2019 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I thank the Minister for repeating the Statement made yesterday in the other place by his right honourable friend the Member for Old Bexley and Sidcup. This supposed funding boost is extremely disappointing and will do little compared with the billions of pounds that his Government have already cut from local communities. After all the hype, I would have expected more from him and the Government. This will do little to reverse the damage that they have inflicted in each region of England.

The reason why many of our towns are struggling is a near-decade of cuts to local authority funding and to public services by the Minister’s Government. The fact is that between 2010 and 2020 councils will have lost 60p in every £1 that the Government provide for services. Can the Minister tell the House why nine of the 10 most deprived councils in England have seen cuts three times the national average? How can that be right?

The Statement says that the Government have taken deprivation into account when considering the allocation of this fund. I am very pleased that they have done that, but I am also conscious that the Minister’s right honourable friend in the other place refused to say that deprivation would be taken into account when considering the local government settlement. Can the Minister tell the House why that is the case? It is quite rightly included in this fund but not in the fair funding formula review.

The Minister mentioned Blackpool. Blackpool is one of the most deprived areas in England and has seen a cut in spending power of more than £45 million. That is more than the £40 million a year that the entire north-west of England will get from this fund. Look at the east Midlands, an area I know very well. Over seven years it will get £110 million, which is £15.71 million a year. If the Government allocate that funding evenly per local authority—I know they will not do that, but if they did—it works out at around £393,000 per year per authority.

This funding announcement is a drop in the ocean. We have seen spending cuts of £7.3 billion over the past decade because of nine years of austerity. Even if we are being favourable to the Government and to Ministers, this enticement is £5.7 billion short of the cuts that they have already inflicted.

The funding promised by the Secretary of State over the next seven years does not even get close to matching the amount of funding that regions have received from the European Union over the last seven years from the European Regional Development Fund. This package is £642 million a year short of the money that England would have received.

Also, why is £600 million unallocated? I know the Minister said that there will be some sort of bidding process, but we have had no more clarity about that. How will the money be allocated? He also mentioned other parts of the United Kingdom. Will the money be distributed through Barnett-type formulas? Will there be additional money for the other parts of the United Kingdom? What will the allocations to Scotland, Wales and Northern Ireland be?

This is a most disappointing announcement indeed from the Government, but unfortunately not surprising. We have such serious problems in our towns, seaside resorts, communities and high streets that we need an ambitious programme to deliver their success so that they can thrive, with proper support for jobs, transport, housing and communities. As I said, the Government have failed in this announcement.

[Baroness Pinnock (LD)]

My Lords, I remind Members of my registered interests, in particular that I am a councillor in Kirklees Council in West Yorkshire. I thank the Minister for repeating the Statement, but it raises far more questions than answers, so I will ask those questions in the hope and expectation of finding the answers.

The funding is described as being for towns. Could the Minister define what towns will be eligible? Are cities excluded? For example, my part of the country—West Yorkshire—contains Dewsbury, a town, eligible, and Bradford, a city, not eligible, despite the fact that their deprivation assessments will be very similar?

It seems from the Statement that the funding will be allocated to the local enterprise partnerships and the mayoral combined authorities, yet these are the very institutions that have clearly not used growth deal funding to invest in those towns; otherwise, there would be no need for this additional funding. The city region-centric approach may well be successful in bringing new jobs into cities, but my experience is that these institutions have not succeeded in reviving our towns. Yet these are the self-same institutions that will be the keepers of this small fund. Could the Minister explain the rationale for this approach? Given that the LEPs serve large populations, how can the needs of small towns feature and be understood? Local councils are much better placed to understand their communities and which ones will benefit from the relatively meagre investment, so why the LEPs?

Then there is this total failure of government thinking that devolution equals handing out funding that in some way local people can influence. The Statement refers to the Government being in charge. It says:

“We will work with local areas to explore town deals that unlock local potential”.—[Official Report, Commons, 4/3/19; col. 714.]


This is no way to engage communities. Will the Minister confirm that plans for investment have to be agreed with the Government? How will residents and councillors of the towns involved be able to determine what funding programme best meets the needs of their town?

The Statement lists the aims of the funding: to create new jobs and training opportunities, and economic development. The list sounds familiar. The Single Regeneration Budget programme 25 years ago had the same aims. However, that had a budget of £5.7 billion over six years—many times larger than what is now on offer. The criticism of the SRB was that gains made in local economies were not sustainable. Have lessons been learned?

That leads me to the size of the funding pot. To take an area I know, Yorkshire and the Humber is allocated £197 million over seven years—£28 million per year for the whole region. These are some of the towns in the region that I think will meet the criteria loosely set by the Government: Dewsbury, Batley, Huddersfield, Halifax, Rotherham, Doncaster, Castleford, Pontefract, Scarborough, Grimsby, Scunthorpe, Barnsley, Selby, Goole, Bridlington, and no doubt others. They may have around £2 million a year to invest. It will do something, of course, but—to use a catchphrase—not a lot.

In the context of the massive cuts to local government funding, this is a drop in the ocean. My own council has had cuts of £183 million up to 2018, and has to make a further £40 million of cuts in the next two years, despite government claims of funding rises, which ignore rising demands—and of course, these cuts do not include the squeeze on school spending.

Another way to consider the funding is to compare it with the £1 billion granted to Northern Ireland. The exchange rate per DUP MP is £100 million. There are 54 MPs in Yorkshire and the Humber. Their exchange rate is £3.5 million. So this fund is a lollipop, a sweetener, and, as they say in Yorkshire, “summat for nowt”. I look forward to the Minister’s answers.

[Lord Kennedy of Southwark]

Before the Minister responds, when I spoke earlier, I should have drawn the House’s attention to my registered interest as a vice-president of the Local Government Association.

[Lord Bourne of Aberystwyth]

I thank the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock, for their contributions from the Front Benches of their respective parties. I will try to cover the points they raised. First, I will try to put into perspective what is regarded as “something for nowt”.