Oral Answers to Questions
Debate between Lord Pickles and Hazel Blears
Mr Pickles
My hon. Friend is a very distinguished man, and perhaps only someone of his greatly distinguished nature could regard the reign of Mary Tudor as topical. Nevertheless, he makes a good point. We enjoy the power of prayer in this Chamber under the Bill of Rights 1688, and what is good enough for us should be good enough for councils. That is why I was pleased to introduce the general power of competence. The authorities that do not qualify will make arrangements very soon.
Hazel Blears (Salford and Eccles) (Lab)
I believe that the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), the Minister with responsibility for fire and rescue services, is an eminently reasonable man. In the Adjournment debate last week, he will have heard the strength of feeling expressed on behalf of metropolitan fire and rescue authorities. The grant for Greater Manchester has been cut by 12.5%, whereas the grant for Cheshire has increased by 2%, when Greater Manchester has more fires, more deprivation and more poverty. I believe that settlement to be grossly unfair. Will the Minister, as a reasonable man, change the settlement for years three and four to protect people in metropolitan areas?
Local Government Finance
Debate between Lord Pickles and Hazel Blears(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Pickles
The hon. Gentleman must pay more attention. When I say that I will give way in a few moments, that is exactly what I mean, but there is a queue, and he is a little way behind.
Hammersmith and Fulham, Kensington and Chelsea and Westminster councils are merging their back offices to save £35 million. West Norfolk is freezing council tax and car park charges, as well as councillors’ allowances. Reading borough council has decided not to cut but to increase funding for voluntary groups. We have heard today that Ribble Valley borough council has also decided to protect voluntary groups and not to cut front-line services.
I am grateful that many councils have brought the same constructive attitude to discussions about the funding settlement. They have helped us to put the finishing touches to a settlement that is sustainable, fair and progressive. We have focused resources on the most vulnerable communities. We have given more importance to the levels of need within each council. We have grouped councils in four bands. The most dependent on Government funding are seeing proportionately lower falls in grant. The more deprived places will receive far more funding per head than the better-off places. For example, Hackney will receive £1,043 per head and Wokingham will receive just £125 per head. These changes have made the system fairer and more progressive than ever.
Hazel Blears
The Secretary of State knows that I have raised the issue of business rates in this House on a number of occasions. To pursue the point made by my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), the Office for Budget Responsibility has forecast that the business rate take will be £24.9 billion for 2010-11 and £26 billion for 2011-12. The Secretary of State has distributed £3.5 billion less in 2010-11 and will distribute £7 billion less in 2011-12. Is he saying that the OBR forecasts are out of sync by £3.5 billion and £7 billion? Surely the rising trend in business rates means that there is more money in the pot. If he distributed more money, we would not have to have the cuts that we face.
Mr Pickles
I am most grateful to the right hon. Lady. What she needs to understand is that two figures have been suggested—one by the Office for Budget Responsibility. Following those figures, we decided to move some things from ring-fenced grants into the general grant. That accounts for the difference between the two sizes. With regard to the level of potential surplus, there is a possible notional surplus in 2013 and 2014. As I explained to the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), what happens is that within the total sum available for grant, if there is a surplus, all is redistributed. However, as happened under the right hon. Lady’s Government and under previous Governments, the amount in the revenue support grant is reduced on a compensatory basis, because the level of the total settlement is fixed. There is no difference; it is just a different way of calculating.
Mr Pickles
I shall give way in a moment, once I have made this point. The right hon. Gentleman is a senior Member of the House, but I would be grateful if he extended me the courtesy of allowing me to make a few points.
The deputy leader of Nottingham city council is a gentleman called Graham Chapman, which is obviously the same name as the late and long-missed member of “Monty Python’s Flying Circus”. It seems to me that the right hon. Member for Don Valley (Caroline Flint) should get on the phone to that gentleman and tell him, as his namesake’s mother did in “Life of Brian”, that he might be the deputy leader of Nottingham city council, but he is a very naughty boy. If it is necessary for me to use the powers that I have to force Nottingham, I will, but why should this process be held back by one obdurate council that simply wants to play politics with transparency?
Hazel Blears
Let me take the Secretary of State back to his assertion that no council will lose more than 8.9% of its grant. Is he not completely ignoring the fact that the poorest authorities get area-based grant? Some 11% of my council’s budget in Salford is ABG, because we are deprived and poor, and we need extra help. Slashing the area-based grant means that our cuts next year will be 15%, which is a massive amount in the first year.
Mr Pickles
I can bring better news to the right hon. Lady, because the figure will not be 8.9%, but 8.8%, which I hope she finds helpful. She arrives at those figures only if she completely ignores the figures for council tax, which are such that we can give her a guarantee that her council’s spending power will not be reduced by more than 8.8%. Because I have enormous respect for her, I shall make just one further point. I thought about this issue seriously, in a situation where money was clearly being reduced, and I came to the conclusion that if I increased relative need, the best way to help authorities such as hers in taking the money down would be to put it into the block grant. That is because the block grant has such a distributive effect. I accept that there is a degree of swings and roundabouts involved, but her authority came out of that process better than it might otherwise have done.
Hazel Blears
My hon. Friend is absolutely right; we share the same concerns. The Greater Manchester fire and rescue authority has had to make even further cuts because the figures changed halfway through its budget process.
I want to make just a few observations about the position that Salford is in. The Chancellor of the Exchequer said, “We will not balance the books on the backs of the poor.” However, Salford is one of the poorest authorities. We are in a consultation process with our community, and I spoke to my leader this afternoon. We are looking at the possibility of having to close libraries and one of our sports centres, as well as taking £1 million out of our youth service and £500,000 out of adult social care. Unlike many local authorities, ours has said that it still wants to provide services to elderly people who have moderate, as well as critical, needs. That has always been a priority for Salford, but we are still going to have to take £500,000 out of that service. We will also have to make a 42% cut in the Connexions service. I want my youngsters to get the skills and to have the ambition to get those jobs in Media City, but how can they aspire to that kind of future if they do not have a proper careers guidance service?
We are having to cut the citizens advice bureaux by 15%—it is the minimum we can do, but we know that people will be out of work, as we are looking at losing 450 jobs in the city. People will have debts and will need advice, so what do we have to do? We have to cut the CAB and the 60-odd independent financial advisers that we funded through the financial inclusion fund, which is about to be slashed. The amount of advice left available will be absolutely minimal. Our voluntary organisations will have to be cut perhaps by 10% to 15%. Again, Salford council is really trying to make sure that it protects those voluntary organisations, but they cannot be immune from the cuts that the rest of the service has to take.
I mentioned area-based grants. I feel strongly about them because area-based grants were specifically directed at poor and deprived areas that had extra needs. The slashing of area-based grants has disproportionately affected those living in the poorest parts of our community. In Salford, it was 11% of our total budget, and much of that money was used to tackle crime and antisocial behaviour, to provide youth services and diversion schemes and to keep young people off the streets and make the community safer. All that is about to disappear.
I genuinely feel that these cuts are unfair, despite the Secretary of State’s smoke and mirrors about spending power, his new definitions and all his obfuscation of the real situation. The cuts in spending power in his area are of less than 1% next year, yet we are looking at 15% cuts in Salford. For the area of the Leader of the House, the cuts are less than 1%; for the Home Secretary’s area, less than 1%; for the Culture Secretary’s, the Transport Secretary’s and the Education Secretary’s areas, less than 1%. These are some of the most affluent parts of the country. I believe that if cuts have to be made, which they do, they must be fair—but they are simply not fair.
I say to the Secretary of State that I have a huge amount of respect for the people of this country: they are not stupid; they understand that hard decisions have to be made, but they also have a well-developed sense of justice and fairness. They will see right through what the Secretary of State is doing. Transparency will come for the Tory party’s actions; people will see right through them.
I commend the campaign launched in the Manchester Evening News. It is a massive campaign against the cuts, urging local people to sign a petition. The Manchester Evening News is not a partisan paper; it represents people right across the conurbation. They, too, can see the unfairness. Nine of our 10 boroughs in Greater Manchester have cuts higher than the national average. The only borough that does not is in the constituency of the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell); that has a below-average amount of cuts. People across Greater Manchester—people in Rochdale, in Oldham and in places right across the area—know that these cuts are deeply unfair. I have no doubt that action will be taken at the ballot box in May.
My final point is about what else could be done. We heard a lot from the Secretary of State about community budgets. As he well knows, I started off my time in the Department with Total Place, which meant bringing together and pooling budgets, co-location, integrated services, systems engineering, and service redesign—all those things that Government Members have talked about. However, for major service redesign, time for planning is necessary—it cannot be done at the drop of a hat, because different skills and competences are involved and people might have to be made redundant. We have heard about the lack of capitalisation for that sort of project; it cannot be done all at once. I echo the points made by my hon. Friend the Member for Sheffield South East (Mr Betts), the Chairman of the Select Committee. Why are these cuts front loaded, which makes it so much more difficult to do the systems redesign that could result in efficiencies without the need for front-line cuts?
The Secretary of State will tell me otherwise, but I genuinely believe that the reason for having the cuts early on is that more freedom to manoeuvre—and to be more generous—will be possible in the two years leading up to the next general election. The Government will hope to reap the rewards from that. I hope that it is not the Secretary of State’s intention to make a partisan political budget in this way. I would like some reassurance that he is trying to be fair rather than to seek political advantage. When we reach the two years before the election and we will have had these massively front-loaded cuts in the first two years, I will be amazed if we do not see the Secretary of State seeking some room for manoeuvre for electoral advantage.
Mr Pickles
I am grateful to the right hon. Lady who, as always, is giving a thoughtful speech. I can assure her absolutely that that it not the intention, and I can assure her absolutely that that is why we have put in extra protection for the most vulnerable.
Hazel Blears
I think that if the Secretary of State came to Salford—as the Minister for Housing and Local Government did recently—and said that he had given extra protection to the most vulnerable members of our community, he would receive the sort of typically robust Salford reply that I could not possibly use in the House.
Over the last couple of weeks, we have heard a great deal about the big society. Apparently Lord Wei is unable to do quite as much as he used to because he no longer has time to volunteer, which I thought was a wonderful irony. As the Secretary of State will know, I strongly support the underlying principles of involving the community, devolving power and introducing more plurality to the provision of public services. However, as has been pointed out by Dame Elisabeth Hoodless of the Community Service Volunteers, Thomas Hughes-Hallett, chief executive of Marie Curie Cancer Care, Sir Stuart Etherington of the National Council for Voluntary Organisations, and Sir Stephen Bubb of the Association of Chief Executives of Voluntary Organisations—none of whom are partisan people—while the Government talk of the need to empower voluntary organisations and local communities, they are making massive, deep, draconian cuts in the voluntary sector. That simply does not add up. It is totally contradictory, and it is increasing the sense of cynicism and disempowerment that exists in our communities.
If the Government have any genuine commitment to giving people the power to change their own lives, they must recognise the total incoherence and inconsistency that lies at the heart of their so-called big society. This is not community action; it is do-it-yourself. The Government are telling people, “You are on your own, with no back-up and no ability to take on roles of this kind.” I know that some Members genuinely support these principles, but I fear that, given the cuts that we are seeing, they are going absolutely nowhere except into the sand.
My final plea to the Government relates to community budgeting. For goodness sake, let us get on with it more quickly. We will be able to ameliorate some of the pain that our communities will feel only if we can re-engineer our services, pool the budgets, achieve the necessary co-location, and start to address many of our current problems. At present that programme is minimalist. I think we have been told that four areas in the country might adopt community budgeting. We know what happened with the four big society areas. I ask the Secretary of State to enable us to support many more areas, so that they can provide services in a new and, I believe, more integrated way that could lead to a transformation in the provision of local government services.
Localism Bill
Debate between Lord Pickles and Hazel Blears(13 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Pickles
I am surprised by the hon. Gentleman’s statement, because he and I have previous. When he was engaged in a respectable profession before returning to this House, I recall him advising me on these issues. His advice was that these things should not be absolute, and that the Secretary of State needs to retain residual powers just in case. He should not castigate me for taking the advice that he gave all those years ago— nice try.
Hazel Blears (Salford and Eccles) (Lab)
The Secretary of State said that the current power to do anything that is in the interests of economic, social or environmental well-being is too narrow and that his general power of competence will extend the ability of councils to take action. Will he give practical examples of issues that do not fall within economic, social or environmental well-being, on which councils will be able to act? I am sure that the House wants to be enlightened on how large the power is. Before the election, he said that he wanted to give councils the power to do anything other than raise taxation. Is that still his intention?
Mr Pickles
The right hon. Lady makes a reasonable point. She will be aware of problems with London authorities’ insurance, and the general power of competence will deal with those. However, the question is: what is the difference between the general power of competence and the general power of well-being? The truth is that there is not much difference, and we welcomed the intention to introduce the latter, but only about 17% of authorities have done so. The reason for that is the innate conservatism of those providing legal advice, so councils have tended to err on the side of not introducing it.
The reason why the general power of competence is so important is that it turns the determination requirements on their head. All those fun-loving guys who are involved in offering legal advice to local authorities, who are basically conservative, will now have to err on the side of permissiveness. That is a substantial change, and I would have thought that there would be no difference between the parties on that matter. I believe that a general power of competence is better than a general power of well-being, because the latter had to be invented as a concept whereas the former is well accepted by local authorities throughout the world, which understand exactly what it means.
The Bill will let councils decide the best way to organise themselves, whether through cities having mayors, through local council executives or through the committee system. On the subject of mayors, I am delighted to report to the House that Lord Adonis will begin a tour of 12 English cities, talking to local people about the prospect of having a mayor. I look forward to his report. The Government are grateful that that distinguished former Cabinet Minister is undertaking that important work.
Local Government Finance
Debate between Lord Pickles and Hazel Blears
Mr Pickles
In the interests of brevity, I congratulate Tamworth. That is the kind of Tamworth declaration that I would expect.
Hazel Blears (Salford and Eccles) (Lab)
The Secretary of State says that he is being generous in putting £30 million of his departmental budget into local government. For a big man, that is pretty small beer. Does he accept the truth that the abolition of area-based grant means that the poorest places, especially in the north, will be worse off? In Salford, £3 million of area-based grant goes into tackling crime and disorder.
Mr Pickles
For Salford, the reduction in spending power will be 8.5% next year and 3.9% the following year. There is a misunderstanding from the right hon. Lady, although I do not mean that disrespectfully. The way to protect the poorest is to put money into the block grant, because that is the most distributive grant. That point is like the argument about the level of capitalisation. The more money that goes into the block grant, the more that vulnerable communities are protected.
Local Government Funding
Debate between Lord Pickles and Hazel Blears
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
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.
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?
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 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.
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.