Local Government Funding

Debate between Lord Watts and George Hollingbery

Tuesday 30th November 2010 Westminster Hall

[Mr Watts]

I do. I am pleased that the Minister here is not the Secretary of State, because it is clear from the Secretary of State’s comments that he has no idea of the implications of the cuts he is advocating. The idea that the cuts can be dealt with through efficiency savings or by councils using their imaginations as they have not done in the past is ridiculous. I point out that many of the authorities facing the biggest cuts, including my own, are the most efficient and effective already.

My council is a five-star council that provides excellent education, social services and other council services. It has kept its council tax below inflation rates for the past 10 years, and it runs an effective partnership with the voluntary and private sectors, yet it faces up to £12.7 million in cuts in 2011-12 and up to £24 million in cuts by 2014-15, on top of a previous cut of £5.6 million from the working neighbourhoods fund. We also face the potential loss of enterprise growth funds, which have helped regenerate my area; the money is spent in partnership between the private, public and voluntary sectors. Clearly, it is not inefficient councils that face the biggest problems but councils that are well run and well managed and provide good services.

As colleagues and I have said, the Government’s record on the matter is not good. So far, cuts have hit the most deprived communities the hardest. They have been front-loaded, and the cuts to the working neighbourhoods fund have hit the most deprived communities in Britain. The record so far is not good.

[George Hollingbery (Meon Valley) (Con)]

Does the hon. Gentleman agree that the councils in the south to which he refers so freely as exceptionally well funded by wealthy local populations suffer exactly the same problem as those in the north? The cuts are fair and proportionate and carry on across the country. The level of funding in many northern councils is considerably higher per capita than in the south. I understand, of course, that the level of need is higher, but does he agree that pain is being felt all over the country and that the cuts are in fact fair?

[Mr Watts]

I accept that not all deprived communities are in the north. There are certainly deprived areas in the south, and they have been hit hardest as well. They have not been exempt. I do not say that there are no deprived councils in the south, because there certainly are. We need not go farther than Southwark to see major problems, as there are in many other parts of the country.

However, the tax base in most southern areas puts them in a much better position to deal with cuts than areas where the tax base is low, such as St Helens and the SIGOMA authorities. So far, the south-east has lost 13%, the south-west has lost 12% and the north-east and north-west have lost 16%. That demonstrates how unfair the cuts are. I recommend that the Minister read the SIGOMA document “All in this together”, which dispels the lie that we are in this together by showing that, and supporting the argument that, local authorities in the most deprived areas are being hit hardest.

[George Hollingbery]

I am sorry to interrupt again, but that goes to the heart of what I was saying. The level of subsidy per capita in Sedgefield, for example, is five to six times higher than in Hampshire county council. That means that the cuts can, to some degree, be more easily borne by those with much higher per capita funding. The proportion being removed in this element is right at the margin down in the south, and it hurts.

[Mr Watts]

Before it was changed by the new Government, the system of allocating resources was based on deprivation. A number of factors were to be taken into account, and an academic research document indicated where the grant should go. Unfortunately for many authorities, the Labour Government did not introduce all those changes but left money in some of the southern areas that should have been passed to the north. The changes were not fully implemented.

We would have no problem if an academic study was undertaken on the need to spend that took account of deprivation, if that is what the Government wanted to do. However, the Government are not doing that. Instead, they are finding ways to cut budgets for the most deprived councils without an academic study, and with no research documents to back their actions. Frankly, we think they are gerrymandering the system to ensure that their councils are not hit as badly as ours.