EU Funding (Rotherham and Barnsley)

Debate between Lord Watts and John Healey

Monday 1st July 2013 Commons Chamber

[John Healey]

Indeed. The hon. Gentleman sums up my full argument in a nutshell, and I am grateful to him for that.

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

rose—

[John Healey]

I shall give way to my hon. Friend, but for the last time.

[Mr Watts]

Is not the key point that the Government have taken money from some poor parts of the country and given it to other poor parts of the country? If we look at Cheshire and Warrington, for example, although its GDP is at 119%, it will get £157 compared with Sheffield’s figure, which is less, and Merseyside’s, which is less. How can it be right for a more affluent area to get more funding per person than some of the most deprived parts of Britain?

[John Healey]

Over the last year, my hon. Friend and I have campaigned for special transition region status for the purposes of the new European funding programme, and have tried to persuade the Minister of the case. My hon. Friend has anticipated some of the points that I shall be making later, which lie at the heart of the problem. I want to deal with the facts, the fix and the future. I want the Minister to confirm the facts, explain the fix, and pledge to make good the funding of our areas for the future.

Let me begin with the facts. As the Minister knows, I welcome the commitment to the European regional development fund and the European social fund as part of a European budget settlement that represents the first-ever real-terms cut overall. I welcome the inclusion of transition region status for ERDF purposes, although the Government held out against it until the final agreement. I welcome, in particular, the Minister’s commitment in his statement on 27 June to a local rather than a central programme, with decision-making powers in local areas. I also welcome the decision to enable European funds to take their place as part of the strategic plans of the local enterprise partnerships.

We know how to use European funding in South Yorkshire, we know how to use it well, and we have firm plans for its use in the future. The advanced manufacturing park on the edge of Rotherham would not be there without support from European funding, and the nuclear advanced manufacturing research centre and the knowledge transfer centre in Rotherham would not be there without £15 million from the ERDF. We have plans for the future. We can put the money to good use, and that will include support for the city deal and for 4,000 extra apprenticeships throughout South Yorkshire.

However, whereas our current seven-year programme of funding from the European Union is worth is worth more than €400 million in South Yorkshire alone, the new seven-year funding programme will provide €203 million, not just for South Yorkshire but for the five north Nottingham and north Derbyshire districts as part of the Sheffield city region. As was pointed out by my hon. Friend the Member for St Helens North (Mr Watts), that is about €117 per head in an area with a population of nearly 1.8 million and a GDP that is 84% of the European average. It represents a cut of more than 50% in South Yorkshire’s funding for the current seven-year period.

Ours is one of the 11 transition regions in the United Kingdom. That means that our GDP is between 75% and 90% of the European average. Which economies have been earmarked for extra funding to boost jobs, skills and businesses? All the more developed regions have a GDP of at least 90%, and nine of them will receive more, not less, funding than the Sheffield city region. They include Worcestershire, Leicestershire and, as my hon. Friend said, Cheshire and Warrington. Cheshire and Warrington has not a GDP of 84% like South Yorkshire but a GDP of 119%, and will receive EU funding of not €117 a head like South Yorkshire, but €157 a head.

Fire Service (Metropolitan Areas)

Debate between Lord Watts and John Healey

Wednesday 7th March 2012 Westminster Hall

[John Healey (Wentworth and Dearne) (Lab)]

rose—

[Mr Watts]

rose—

Local Government Finance Bill

Debate between Lord Watts and John Healey

Wednesday 18th January 2012 Commons Chamber

[Mr Watts]

If an area faces the wholesale closure of some of its industries, that obviously creates demand for the local authority’s services. Is it not a fact that such a local authority will lose money by the transfer to central Government and through the loss of business rates, and will therefore be less able to respond to the needs that are created by the wholesale closure of those industries, which we have seen in parts of the country?

[John Healey]

My hon. Friend, as a former leader of St Helens council, knows a great deal about the local government finance system and the pressures on local government. He may not have heard my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) in the last debate refer to what has just been described as a double whammy. In other words, there may be a loss of potential income at the same time as, and as a result of, the event that causes a greater need and demand for the services that have to be funded through that revenue stream. That is a concern.

I want to ensure that the Committee is clear that this is a fundamental shift in the basis of our funding calculations and in what local councils in England have to spend. The system will no longer work on the basis of need. It will not take account of the fact that there are three times as many looked-after children in South Tyneside as in Surrey or that there are five times as many children in poverty in Middlesbrough as in Wokingham. It will not take into account the capacity of a local area to raise resources, in particular through council tax. It will not take into account the fact that Bexley and Barnsley have a similar population, but that Bexley raises £37 million more in council tax each year. It will take no account of the fact that Brent has a similar population to Rotherham, but raises £22 million more each year in council tax.

--- Later in debate ---

[John Healey]

The very point that I am making is that the current system, complex as it is, takes account of resources—an area’s capacity to raise revenue, especially through council tax—as well as the needs of the population in that area for the essential services that local authorities provide. The formula covers both and is based on the principle that I outlined.

[Mr Watts]

If the Government were truly serious about taking need and the ability to raise funds into account, they would have had an independent assessment, outside the political arena, to ensure that grants for local authorities in future reflected need. Comments from the Government Members are always about how much one local authority gets compared with another, and always ignore need. The reason for higher funding is that the need exists.

[John Healey]

Whatever side of the House we are on, we should endorse the principle that objective, sometimes independent, assessment is the basis for better decisions. I have never been one for saying that important decisions, which should be taken by politicians, who then are accountable for them, should necessarily be outsourced to independent experts who do not have the direct accountability that we and members of the Government have, but my hon. Friend makes an important point that is relevant to our discussions. It is impossible to make any sensible assessment, let alone a sound, independent assessment, of what the system will mean for the future. That makes our discussions and the decisions that we are required to make as members of the Committee difficult. We are making big decisions, largely in the dark, and we are being asked to give members of the Government significant regulation-making powers that will define the most important dimensions of the way in which the system works and what is available for people in different areas.

I want to underline the point that spending to meet increased need in future will have to be funded by the business rates increase. The council tax freeze and referendum start to remove that as a realistic alternative source of additional funds.

--- Later in debate ---

[John Healey]

My hon. Friend is right. She made that point powerfully last week in her Second Reading speech, which was one of the best that the House heard. Whether for children or councils, incentives need to be simple, and the rewards and rules need to be clear, but the system that the Bill will introduce falls far short of those basic objectives for any system of rewards and incentives.

[Mr Watts]

Is there not another issue here for the local authorities with the lowest business rates take? The Government have indicated that they believe that those local authorities have low business rates take because they are not interested in developing businesses and do not do all that they can to attract businesses to their areas. Does my right hon. Friend consider that perverse, given the problems in areas such as St Helens and many others, including his own? The major concern of local authorities in those areas is to bring in as many jobs as possible, but because of their location, the skills base and other things, it is extremely difficult. It is insulting for the Government to pretend that it is because of a lack of effort by local authorities.

[John Healey]

A number of colleagues have made that point, about local government in general and their local authorities in particular. It is hard to point the finger at any council and say that it has not bust a gut in recent years to see its economy grow and jobs created, because that is to the benefit of their local area and the local people they serve, and that would also be the view of most Members. I still think there is a case for trying to design a system that rewards local people, via their local councils, where they are successful in that. Under the last Government, we attempted to do that through the local authority business growth incentive scheme. The system that we are now discussing is clearly a new way of doing that, but its fundamental flaw is that it tries to fix the whole funding system for local government at the same time as using the same, single tax stream to create that incentive. The new system is trying to do too much with that one funding system, creating contradictions and tensions, which lead to the sort of complexities that the Minister is trying to counter in the design of the system.

Health and Social Care Bill (Programme) (No. 2)

Debate between Lord Watts and John Healey

Tuesday 21st June 2011 Commons Chamber

[John Healey]

The Minister, his colleagues and the Prime Minister have broken their word so often so far on the NHS that we cannot take at face value what the Minister says. We will wait to see and we will judge what he does when we see the detail of the amendments that he tables.

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

Does not this go to the root cause of the way the Government are dealing with the NHS? They are dealing with it piecemeal. At present we have an integrated health service. Does not their approach show that they want to break that NHS up?

[John Healey]

My hon. Friend is right. What the Government are doing is reckless and rushed. The NHS is still intact, but what they are doing will break it up as a national service, as we know it.

Future of the NHS

Debate between Lord Watts and John Healey

Monday 9th May 2011 Commons Chamber

[John Healey]

In principle, that is a good move. The Opposition, including those of us on the Front Bench, have said that it makes sense in principle to give local authorities a lead responsibility on public health; after all, they are responsible for things that affect public health such as housing, employment and a good environment. The Government’s failure is that local authorities are not getting the powers or resources to do the job properly. The provisions in the Bill will fragment the NHS and make it harder, not easier, for them to do that job.

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

Can my right hon. Friend explain why the Secretary of State says in public that the change is not about the privatisation of our hospitals, when in fact that is exactly what his officials are doing behind closed doors?

[John Healey]

My hon. Friend has been pressing that point with his local hospital, because it is quite clear that the hospital’s managers were forced to look at privatising it and having its management run by a private company. I fear that under the provisions of the Health and Social Care Bill, more hospitals will be driven to the brink and will have to face the prospect of insolvency or a takeover by the private sector companies that are lining up to make the most of the Government’s plans for the NHS.