Alex Cunningham
Main Page: Alex Cunningham (Labour - Stockton North)Draft Tees Valley Combined Authority Order 2016
Alex Cunningham Excerpts(8 years, 8 months ago)
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Alex Cunningham (Stockton North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bone, bright and early this Tuesday morning. It is a particular pleasure to follow my hon. Friend the Member for Nottingham North, given his vast knowledge of constitutional affairs and devolution. I strongly agree about the importance of devolving power all the way down to communities.
The proposal for a Tees Valley combined authority pre-dates negotiations on devolution for the Tees Valley, but although the debate is about the establishment of the combined authority, there is a clear link, as the Minister has said, to the devolution deal.
As my hon. Friends the Members for Redcar and for Middlesbrough have said, the Tees Valley authorities have a long and successful history of working collaboratively, not least on economic growth in the sub-region. There is also a strong history of working with the private sector, and since 2012 a key vehicle for doing so has been the LEP, Tees Valley Unlimited. Believe you me, Mr Bone, it could teach other LEPs a few lessons about how to do business properly.
I support the measures being proposed today, which formalise what has been happening for years, although I question where the added value will come from. That is not because I do not have confidence in the leaders of our Tees Valley authorities; they have great ideas, and the ability and the will to make this change, if they are granted the powers and resources to do so. My mother used to say to me, “If is a very small word, with a very, very long meaning,” and it certainly has, because it is those resources for the combined authority that I worry about.
Additional funding is good news for the Tees Valley and it should be welcomed, if—that small word again—with some caution. Devolution could bring real benefits to the area, if it results in an additional £15 million a year under the devolution deal that the combined authority will be responsible for. However, context is all-important. Combined authority measures come at a time when Tees Valley’s five local councils have seen their budgets cut by nearly half in the last five years, and they still face further huge cuts that are worth considerably more than £15 million.
Ministers have come up with a big number in the devolution deal by agreeing to a 30-year deal, which in reality could mean little beyond the life of the current Government. The Minister and I share the borough of Stockton-on-Tees; we represent the entire borough between the two of us. Stockton Borough Council is just one of five Tees Valley authorities that will make up the combined authority. It has faced cuts to funding of £52 million in the last six years, and that process is set to continue as elected councillors grapple with further reductions of £21 million over the next four years, bringing the overall deduction in Government funding to £73 million, which is a cut of 61% in the revenue support grant over the 10 years to 2019-20. That is £14 million worse than previously expected.
Claims that Stockton Borough Council will have the same or greater core spending power by the end of the Parliament as it has this year fail to recognise that the model being used assumes that reduced Government funding can be replaced with year-on-year council tax increases. It also assumes that Stockton Borough Council will apply the Government’s new social care levy every year for the next four years, while also assuming the building of 1,600 new houses every year for the next four years. Constructing 6,400 new homes in that period—just in Stockton and not across the whole of the combined authority area—looks extremely optimistic, when the current and recent growth is around 450 homes per year, which is much less than the target.
If that is the Minister’s intention for Stockton, which is only one of the councils in the combined authority, will he spell out why he believes that the formalised combined authority will achieve the vision he has for the area? Also, can he tell us what additional resources, over and above the £15 million a year, will be available?
We desperately need to see the Government commit to fair funding for the individual and combined authorities within the Tees Valley, but fairness does not appear to be on the agenda. Tory MPs who were alarmed that their areas might soon see cuts similar to those imposed on the rest of the country threatened to vote down the Government’s plans, until the Secretary of State for Communities and Local Government announced a £300 million transitional grant, without confirming where the extra money is coming from. However, authorities such as Stockton, which have faced the highest and most prolonged cuts since 2010-11, did not receive a penny of additional funding from the Government’s new £300 million transitional funding grant, and neither did the other authorities that will make up the Tees combined authority. The Minister and I have our differences, but I would have thought that a Tory Minister within the Department could achieve something for our own local authority.
It is not fair that some 83% of transitional funding will be allocated to Conservative-led local authorities. Leafy Surrey, one of England’s wealthiest shires, was gifted a handout of £24 million, despite suffering far fewer cuts than our area. The Prime Minister’s county council in Oxfordshire received £9 million. That is why north-east MPs have asked the National Audit Office to examine just what criteria have been used to gerrymander the distribution of those vital funds.
As I said earlier, I support the creation of the formalised combined authority for the Tees Valley, but there are many questions to be answered about what that authority can achieve in the face of reduced budgets and new funding arrangements that will leave it dependent on development that will be hard to achieve.
I am an optimist by nature, so I hope the Minister will be able to outline what he honestly believes will be the extra that will be achieved as a result of these measures.
James Wharton
It is therefore a shame that so many of the comments seemed to focus on matters that are separate from what fundamentally we are here to discuss. More significantly, those comments were negatively phrased, as if Members have a lack of ambition for the Tees Valley and a lack of faith in the people of the Tees Valley to control their destiny and their future and to use the powers that devolution will give them to create economic growth.
We are entering an exciting period for the Tees Valley, and the combined authority will make a significant contribution towards further enabling that close co-operation—that working together among authorities—that already takes place in the Tees Valley. The combined authority is an important step towards our devolution deal and delivering on that commitment, but I want to see it go further. I welcome further proposals from the Tees Valley, whether that is the combined authority or local leaders, on the powers they would like to see and the future devolution deals they would like to do.
Today, we are taking a significant step in delivering on the deal that has been signed. We are committed to meeting our obligations under that deal. We are looking forward to continuing the work on taking that further, and we are always happy to work with constructive local partners who want to build the economies of their areas and who want to work hard to deliver a better future for their residents. For those reasons, I commend the order to the Committee and the House.
Alex Cunningham
I am grateful to my hon. Friend for giving way. It is deeply insulting to suggest that Members of Parliament who represent the Tees Valley do not have ambition for the Tees Valley. I wonder if my hon. Friend’s expertise in constitutional affairs extends to finance. There is £15 million per year, so £450 million in total over 30 years. How much does he think that the local authorities could borrow in order to finance a capital programme that is probably very small?
Mr Allen
That is a really interesting question. I would be very pleased to talk at length—perhaps too long—about it. However, this is not about constitutional matters but democratic ones. This is about our democracy and how we re-engage people who clearly have disengaged from our democracy. Again, I commend the Government on introducing these proposals. It is very clear that this is a step forward, but there has to be engagement with people. There has to be engagement in this Committee on the issue of the long-term financial settlement between the centre and the localities. Dare I say it, if those who wish to leave the European Union succeed, then of course matters will be raised. There are some very prominent people, the Chair even, who may—
James Wharton
How can I not respond? I will keep my comments brief, Mr Bone, for fear that the longer you are in the Chair in your neutral capacity, the less time you will have to contribute to the broader European debate. I would not want to keep you from that important task.
It is important to be clear about the separation of the two issues. There is the broader issue of local government funding, which is a matter that the House has discussed at some length and, I am sure, will continue to do so. There is then the issue of the funding that goes to the combined authority as a result of the deal it has entered into, which includes some of the funding streams that hon. Members have spoken about, including the £15 million a year, which will make a significant difference to the Tees Valley economy if it is used in the right way. In principle, the people who best know how to use it in the right way are those who know the economy and the area, are who are chosen locally to make those decisions.
It is absolutely the intention of the Government to meet the obligations in the deal that has been reached with local authority leaders of the Tees Valley. We are committed to doing that and we continue to work on it. The order is an important step towards delivering that, which is why I am pleased to commend it to the Committee.
James Wharton
I will give way, but I hope that we are then able to make progress in an area on which, actually, there is probably broad support.
Alex Cunningham
I am grateful to the Minister for giving way. My hon. Friend the Member for Nottingham North demonstrated that he might not be a mathematician but could the Minister tell us what value could be derived from £15 million in terms of borrowing? What would that mean for capital projects for the Tees Valley?
James Wharton
It is not for me to tell the Tees Valley how to use the money that would become available to it, but £15 million a year is the starting agreement. There will then be an assessment of how the money is used, with an opportunity to expand the fund. It will be for the Tees Valley to look at how it best wants to use it—whether it is to borrow or invest, and what it wants to invest it in.
The fund is £450 million over the life of the commitment that the Government have made, and there is potential to increase it when we look at how it is used and how economic growth is generated with it. Ultimately, it will be for the local authority, the combined authority and the mayor, when they are elected, to determine how it is best used. It is welcome and it is additional funding coming to the Tees Valley that would not be coming but for the agreements that have been made and for the deal that is being done. The deal, important as it is, moves closer to completion through what we are here to discuss.