Budget Resolutions and Economic Situation

Alan Whitehead Excerpts

Monday 21st March 2016 Commons Chamber

[Dr Alan Whitehead (Southampton, Test) (Lab)]

This is a Budget that should have come to the aid of local government. Instead, it continues a course of punishment for local government that has been with us for a number of years, with 20% cuts in local government spending up to 2015 and a further series of cuts announced in the autumn statement and the spending review. The Conservative chairman of the Local Government Association commented on those cuts:

“Even if councils stopped filling in potholes, maintaining parks, closed all children's centres, libraries, museums, leisure centres and turned off every street light they will not have saved enough money to plug the financial black hole they face by 2020.”

I am proud of my city council in Southampton, which has faced cuts of £71 million in the past three years, but by heroic efforts and enormous ingenuity has nevertheless kept the libraries open across the city, road repairing schemes up and running, and all children’s centres open, yet it faces further shortfalls in its budget that it will have to plug every year over the next period. We know where the cuts of £3.5 billion announced by the Chancellor for the next period are almost certainly going to fall—on local government and thereabouts. That will exacerbate the shortfalls that local government faces, not just in Southampton, but across the country.

We also face a business rates revolution, which at most can be described as half-baked because of the ill thought-out way it will come to the aid, if at all, of local government. This change in business rates will result in local government having to rely entirely on business rates and local taxation by 2020, but no thought has been given to changes in small business relief. We do not know how changes to business rates will be distributed. We do not know whether the change from the retail prices index to the consumer prices index will mean a substantial reduction in the pot for local government, relying as it does on business rates.

In short, the Budget does nothing to come to the aid of local government at a time when that is needed by people who rely on local government services now and in future. The Budget has failed those people and, unless rapid changes are made, it will continue to fail them.