Local Government Finance

Alex Norris Excerpts

Wednesday 7th February 2018 Commons Chamber

[Alex Norris (Nottingham North) (Lab/Co-op)]

I came to this place having represented my community on Nottingham City Council for six years—something that I enjoyed greatly and that was a real privilege. However, being a councillor between 2011 and 2017 was quite a difficult proposition. We saw massive real-terms decreases in our funding every year as the Government downscaled their commitment to our city. That meant service cuts, council tax increases, and business rates being increasingly vital. It meant local people paying more so that the national Government could pay less. All this in pursuit of an austerity agenda that decimated demand in our local economy, leading to a historically slow economic recovery, and is now to pay for tax cuts of little social value.

I am afraid that is the picture we see again this year: spending cuts. I used to think—I do not know if it was a naive or an optimistic view of the world—that Ministers did not understand local government and that that was why there were cuts of such a scale. My hon. Friend the Member for Sheffield South East (Mr Betts), who is not in his place, said that local government has been targeted as much as anywhere else in the public sector. I thought that it was because Ministers did not understand it, and thought that the services were unimportant and wasteful. Actually, it is quite the reverse. Ministers target local government because they know exactly how it works. They know that hard-pressed councils like mine in Nottingham have to set balanced budgets, so if they pull a lever and say what the reduction is, they will get that reduction, to the penny, from local government, and they can go to their Treasury colleagues having done their job. They will have had none of the responsibility and will get all the benefit. What an easy cut to make!”

That would be bad enough, but these spending cuts have been incredibly unevenly distributed. Between 2014 and 2016—around the transition grant period—Nottingham households lost 250 quid each in spending power, while those in Windsor, to pick one area out of dozens that would fit into this category, lost just £34. But it was those very communities such as Windsor that benefited from the £300 million transition grant to help them to deal with the cuts. In Nottingham? Not a bean.

Inevitably—what else could it do?—that has led to council tax rises in my community. One of the poorest communities in the country, with the lowest discretionary spend, we will now again receive a near 6% increase in our council tax. We have a small council tax base, as others have mentioned, so that will be less helpful for us than it will be for other communities. Our gap in Nottingham starts at £33 million. The Secretary of State talks about increased spending, but the reality of the situation—I suspect it is the same for all hon. Members here today—is that my council will have to make reductions. If I tell my council leader that he has more money, he will tell me that he has to make a £33 million reduction in services. If he gets £6 million in council tax, that is still £27 million that has to come from elsewhere as we deal with the toxic combination of losing grant and having significant increases in demand.

We have heard a lot about demands in adult social care, which are important, but we should not forget children’s social care and the extraordinary pressures it creates. So for my community there will be service cuts. Lest people think that this is an efficiency issue, I want to share with the House the proposals in Nottingham—[Interruption.] I am glad the Chancellor has joined us: I will be able to make a personal plea. The proposals in Nottingham include job cuts in adult social care; reducing funding for weight management, smoking cessation and drug and alcohol services; reductions in youth services; reducing funding for the careers service; reviewing transport services for vulnerable adults; reviewing fees and charges for leisure centres and bereavement services; and increasing fares and reducing frequency on the Link bus services. We have our political differences, but I doubt that anyone would say that those are “nice to haves”.

More importantly, as well as being vital services in my community, those are all stitches in time that save nine. Every single one of those reductions will lead to an increase in spending in public services elsewhere, and that is why this settlement is an act of vandalism. It is short-sighted and ill-judged. But as we all know—and I suggest this is why the Secretary of State is so attached to the idea—my council will receive all the blame. It should not; it is doing an excellent job in impossible circumstances. The fault lies at the door of the Secretary of State.

As for the fair funding review, I have no problem with systems that are a generation old being looked at, but we should be clear when we talk about fairness. I know there is an enthusiasm for capitation, but we should be clear what that would mean for communities such as mine. I am happy to accept, and I almost hoped I would get, an intervention on that point.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

Does my hon. Friend agree that areas of high social deprivation end up bearing the brunt of cuts? In particular, in my constituency, the council has had to contend with £54 million in cuts, £12.4 million of which is to schools, thereby hampering the education of the next generation.

[Alex Norris]

I share my hon. Friend’s perspective. I know that he will work with his council to try to mitigate those cuts, but there is a point at which that becomes impossible. I am sure that in Slough, as in Nottingham—and, as we heard from my hon. Friend the Member for Birmingham, Northfield (Richard Burden), in his area—they have received reductions that are significantly over the national average. The reductions are not just ill conceived, they are unfairly distributed. When we look at the fair funding formula, we must look at that.

I have heard persuasive cases from Shropshire about the needs there. That is why we should look at hard deprivation indices to make our judgments, not special pleading or bartering for votes. We need hard figures that say where the need is greatest, because that is where the funding should go.

I have not been here very long, but I have noticed a couple of curiosities that have been in full force today. Earlier in the day, at Prime Minister’s questions, the Government Back Benches erupted with stories of how great things are going in Members’ constituencies and what a wonderful job the Government are doing. Fast-forward a couple of hours to this debate and suddenly we hear how hard-pressed those communities are and how much more money they need—and need now. As I have said, this is a zero-sum game, and the money would come from poorer communities such as mine. That is one of the odd spectacles.

We also often hear from Ministers at the Dispatch Box that the answer to public service issues is not more money, and councils should not just ask for more money. But then we have had a series of speeches this afternoon asking for just that. When the challenges are in better-off communities, the answer is always more money, but it is always less money for us. I come from Robin Hood country, and it is a sort of reverse Robin Hood. It is particularly galling to have lectures on the state of local public finances from communities that never put their council tax up, use that as a political article of faith and then say, “Look at the shortfall we’ve got.” We have always had to put our council tax up, because that is the only way we can hope to stay anywhere near in line with our demands. Those are our challenges. As we move to the fairer funding review, let us use fairness in its proper and most evidence-based form.

[Mr Peter Bone (Wellingborough) (Con)]

It is a great pleasure to follow the hon. Member for Nottingham North (Alex Norris), who made a passionate case for his area and touched on the issue of fairer funding. He is absolutely right that a fairer funding review has to be done after a period of time. I can remember making that argument to Labour Governments. The problem is that when a fairer funding review is done people then say, “Gosh, that area needs more money, but we’ve got to cap somewhere else” and Governments are not very keen on cutting elsewhere. So while I think the fairer funding formula is essential, and it is clear that county areas such as Northamptonshire should benefit, it is not the answer to all evils.

One clear issue in this debate—Members on both sides of the House have mentioned it—is adult social care. It strikes me that there is no Tory solution to adult social care, and there is no Labour or Liberal Democrat solution either. We need to work together to find a solution to a broken system. We need to do it now, way before the next general election when we start playing party politics again.

You would expect me, Mr Speaker, to talk primarily about Northamptonshire County Council, because by definition it is now the worst council in the country, having effectively said that it has run out of money. It would be very easy for me to get up and say it is all down to the Government not giving the county council the right amount of money, but that is entirely not the case. Other county councils have managed their affairs better—much better. The problem with Northamptonshire County Council is its governance over a number of years. I have to say that it has been the most difficult organisation to deal with. It does not respond to communications—to be honest, it would be easier to get through to God.

All seven Northamptonshire MPs have issued a statement saying that we have lost confidence in the leadership of the county council. The Secretary of State and the previous Secretary of State have known our concerns. I am very grateful for all the effort the Secretary of State has put into tackling this problem and putting in an inspector at the county council earlier this year. I hope that the inspector can report as soon as possible. It is clear that the solution is Lords Commissioners. The county council cannot resolve its own affairs.

How did we get to this mess? It seems to me to be partly due to the cabinet system of government. We have had the same local politicians in the cabinet year after year. They just recycle the jobs. The vast bulk of county councillors in Northamptonshire, of whatever political persuasion, are very, very good, but the fact that they do not get any information from the cabinet has not allowed them scrutinise the mess that has been going on. In fact, we could say that a clique ran the county council, and that is where it failed.

[Alex Norris]

I am sorry to stop the hon. Gentleman in full flow, but I have heard him say that a few times now. For the budget to have passed, the very same councils that he says are outside the clique and ready to save Northamptonshire County Council must have voted for it, either thinking that the budget was a good one or thinking that it was not a good one but doing so out of party loyalty. Either way, would that not disqualify them from leadership as well?

[Mr Bone]

In this particular case, the budget was passed on the assurances that were given by the cabinet, and those assurances were given to the local MPs. We said, “Are you sure you’ve got the money to do this? We’re worried,” and they said, “Oh no, everything’s rosy. The budget is fine.” They produced a budget and passed it. In year, it was clear that the savings they had suggested were not happening, and they had to take emergency measures. The budget will have to be set in February or not, and that is a dilemma for the council at this very moment.