Local Government Funding

Debate between Lord Watts and Simon Danczuk

Tuesday 30th November 2010 Westminster Hall

[Mr Watts]

That argument is put forward by many councils. They say that everyone should get the same; if everyone does not get the same because deprivation is taken into account, they say that that it is unfair. The grant system took account of the ability of local councils to raise local tax and of the deprivation within their communities. The hon. Gentleman suggests that everyone should get the same, regardless of deprivation. As I said before, I would have no problem if the Government were going about the job by doing some academic work and producing a study that people could consult, taking account of existing need and deprivation. That is not happening, and the Government should be ashamed of their proposals.

The Government cuts will go so far as to hit the most deprived communities, and they are front-loaded. We have lost the neighbourhoods fund. As I said before, the south has been protected but not the north. I was saying that the Minister should read the SIGOMA document, which goes into far more detail about the unfairness of the proposed cuts. He should also read “Hard Times”, a document produced two weeks ago by the Industrial Communities Alliance. Hard times is what our communities are in for. That document shows the devastating effect that the cuts in public spending will have on our areas. Anyone who reads it could not help but understand the deprivation that will exist as a result of the cuts.

We fear that the cuts are heading our way. We could lose 33% of our grant in 2010, and a further 22% by 2011. We hope that that is not the case, but we know from what the Government have done so far that that is the likely impact. There is no way in which efficiencies can stop the wholesale closure of libraries, and we will also have fewer policemen and firemen, and fewer social workers, if that level of cuts is introduced in our communities.

On top of that, the Government have top-sliced the council block grant to pay for the freeze on council tax. That will make the situation even worse in communities such as mine, as they will be less able to provide services. Those communities will lose as much as another £500,000 of grant, which they would have received, had the grant not been top-sliced. We understand that SIGOMA authorities may face cuts of up to £44 million over the next few years.

The new homes bonus scheme, which is also hitting local authorities, is intended to provide resources to encourage new homes to be built. Again, I do not think we will do well out of that. It is not that local authorities such as St Helens and the SIGOMA authorities do not want to provide new homes; but given the devastating effect that the Government’s cuts will have in our areas, I do not think there will be much of a market for building new homes. Where we have real deprivation in our housing, we will have fewer resources with which to provide homes for our constituents.

[Simon Danczuk (Rochdale) (Lab)]

I thank my hon. Friend for securing the debate. He is absolutely right about housing, for which there is a great demand in Rochdale. Another problem with the cuts being inflicted is that local authorities are cutting the money they give to local charities that support homelessness services. Petrus community trust and the Sanctuary trust in my constituency are losing thousands of pounds as a result of the cuts, and now cannot even provide for homeless people. It is vulnerable groups in deprived communities who are feeling the effects.

[Mr Watts]

Most local councils and MPs will know that the voluntary sector is very much supported by local government. It cannot exist without funding and support from local government. I worry that not only will we have cuts in council services, but the voluntary sector will be hit as a result. I fear for the safety net of services that are now provided by the voluntary sector, but which will disappear if the cuts are made.

What are we trying to get from today’s debate? We would like an assurance from the Minister that any further cuts will be fair, that more help will be given to the most deprived parts of the country, rather than less, and that any cuts will be transparent so that it can be easily understood how the Government are making the changes to ensure that those in the most deprived communities get the most support. We would like an assurance that any cuts that are introduced will take into account the cuts that are already disadvantaging us. Any future cuts we face should take into account the fact that we have lost more than anyone else.