Local Government Funding

Debate between Lord Watts and Simon Hughes

Monday 6th December 2010 Commons Chamber

[Simon Hughes]

The right hon. Lady would expect me to be sympathetic to that point and I have acted in the past few weeks on that very issue. I have been in to see Ministers; I went to see the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell), and civil servants to discuss exactly that issue. I believe that it would be wrong if all the funding currently given to councils, including the working neighbourhoods fund, which was a top-up in order to assist deprived communities, was not taken into account as the starting point for the calculation for the next grant. I have also argued that it would be inappropriate for there to be a greater decrease in percentile terms for authorities such as hers and mine, which have significant deprivation, than for smaller authorities, just because we happen to have had a larger amount of public money before. I have been given reassurance that an upper and lower percentage reduction will be common across all local government—a band above and below which the reduction cannot happen—and that there is a likely inclusion of at least some, although I hope all, of the other funding, not just the core formula grant.

I understand the point that the right hon. Lady makes, and she would expect me to go into bat for deprived communities, because I represent a borough that has a higher deprivation index than the next-door borough of Lewisham—I believe that is the case. Relative deprivation is not a competition we are proud of, but this is something we have to deal with. Of course one of the things that we have to do is try to get a fair settlement that reflects the needs of and deprivation in all the local authorities in that settlement. Again, I can tell her that I have been doing the job that she, my constituents and my local authority, although it is run by Labour, would expect me to do, just as I would have done when my local authority was run by my colleagues.

[Mr Watts]

rose—

[Simon Hughes]

I will not give way, as the hon. Gentleman has intervened several times in this debate and I want to press on.

It is not just local government that is important; I want to pay tribute to councillors, of all parties, who serve in local government and to many extremely good officers in local government. It contains some brilliant officers, some less brilliant ones and, as in any walk of life, some people who may not be in their right vocation. Southwark council has some excellent officers, and I pay tribute to them and thank them for their courteous and regularly helpful service.

We know the background to today’s debate: we have to deal with a huge economic legacy of the combination of international problems, the banking crisis and the previous Government’s policies. We know that we have to save public money and we know that local government has to bear its share. I note that the Department for Communities and Local Government has imposed on itself a larger percentage reduction in its funding than it is asking local government to bear.

There will also be good things in the settlement, according to the comprehensive spending review. For example, it is clear that there will be additional money— £1 billion a year—for personal social services, in order to deal with the fact that there are more older people and people are living longer. That is a good thing. There will also be far fewer ring-fenced grants—90 will reduce to 10—and that is a good thing for most local councillors, who want to have that choice. In addition, a set of local community budgets will be trialled around the country. We should be positive about those good things.

The Government have to take two other things into account. The first is that some councils have much more reserve than others. The second is that some councils have the ability to raise much more money through council tax than others, because they serve much richer communities. Those background considerations are absolutely relevant.