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.

Public Service Delivery: Northamptonshire

Alex Norris Excerpts

Tuesday 6th February 2018 Commons Chamber

[Rishi Sunak]

It would be wholly inappropriate for me to give a running commentary on councils that we might have a conversation with. As I told the Chair of the Select Committee, my Department consistently monitors all councils and is in dialogue with all of them—as well as the LGA’s peer review process, which we fund—to ensure that we have a good, consistent picture across local government of what is happening on the ground.

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

On 19 December, I extracted a commitment from the Secretary of State, who is not in his place, that the transition grant was finished. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, that grant overwhelmingly went to better-off communities and those with Conservative administrations. Can the Minister assure me that in the light of the calls overnight, following the section 114 notice, for the transition grant to be reinstated, it will not be reinstated?

[Rishi Sunak]

I can tell the hon. Gentleman that the written statement will be laid later today. We will be debating these issues tomorrow, and he will have the answers to all his questions then.

Supported Housing

Alex Norris Excerpts

Thursday 18th January 2018 Westminster Hall

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

It is a pleasure to serve under your chairship for the first time, Mr Sharma, and to engage with the new Minister for the first time, too. She and I share a couple of things in common. We share a background in local government, but we also come to this place from the east midlands. In the east midlands, we are very practical and pragmatic people, and it is that practical and pragmatic side of the Minister that I intend to appeal to today.

I congratulate the Work and Pensions Committee and the Communities and Local Government Committee on their excellent joint report. When I read it, I find it impossible not to note the date it was published: 25 April 2017, when I was just a twinkle in the eye of the Nottingham North electorate. I say that not for the journey down memory lane, but because when I was preparing to speak I looked around the Chamber and noted colleagues in their places, including my hon. Friends the Members for Bedford (Mohammad Yasin)—who is no longer in his place—for Blaydon (Liz Twist), for Weaver Vale (Mike Amesbury) and for Ipswich (Sandy Martin). All of us are new and we all come from local government. It is no surprise that any of us would make supported housing a priority in our early months, because it is incredibly important, and it does not take much time in local government to grasp its impact on 700,000 of the most vulnerable people in our society.

Whatever we do in the changes we make, we ought to be careful. I welcome the Government’s intention to find a long-term sustainable funding mechanism, but we need to understand the impact that even tiny alterations make and we must be wary of unintended consequences.

I rise to talk about merely 1% of the changes—the Minister will be pleased to hear that she will get only a hundredth of the speech of which I am capable—which is the 1% that relates to domestic violence. I am concerned about possible unintended consequences. It may be only 1% of the funding, but it is an extraordinarily high-impact element of public funding, and the stroke of a Minister’s pen can unwittingly close a refuge, when failure to get into a refuge could be life-or-death on that night for an individual.

Mr Sharma, I am sure that you, the Minister and all Members the Chamber follow my contributions avidly, so you may be aware that I raised this topic in a debate on refuges on 12 December. I also raised it in my first question to the Prime Minister, on 13 December. I make no apologies for a little repetition of that material, because we are reaching a crunch moment.

As the consultation comes to a close on Tuesday, I will be at No. 10 with Women’s Aid and others to present a petition with 130,000 signatures. Now, however, is a moment for Ministers and all hon. Members to be clear about our direction and what change we ought to make. I hope to encourage the Government to make an exceptionally timely change now, and there is a real opportunity for that by removing this tiny fraction from their proposals.

Why do I suggest that? It has been mentioned by others, including my hon. Friend the Member for Sheffield South East (Mr Betts) in his excellent opening speech, that the strength of domestic violence refuge provision lies in having a national network of refuges. It does not take a great leap of the imagination to understand that, when a survivor needs to flee her abusers—it is mainly women—she may need to flee a great distance from where they live. Women’s Aid research shows that is the case in more than two thirds of instances.

It is not that there might be a need for a national network; there absolutely is a need for a national network, because the vast majority of the time an individual in one location will need to go to another. An individual in Nottingham actually has a greater interest in what decision makers are doing in Birmingham at the moment than in what is happening in Nottingham. Locally devolving funding knocks into tiny pieces a complex ecosystem of resources and threatens the good operation of services.

There is a compelling case for the service to be national, not local. That is not just my conclusion or that of Women’s Aid, but the substance of the report, both in paragraph 105 and conclusion 20. The report states the “unique challenges” that the sector faces, but there is more to it.

I am a big fan of local devolution. It is probably a common trait of those who have spent time in local government that we feel we could do more if given the opportunity. I am also, for my sins—I do not talk about this often because there is no credit in it, only blame—a wily veteran of local authority commissioning. I led on commissioning in Nottingham for three years, and if I were still in that role I know how I would handle a devolved pot: I would seek to reduce my unit costs by creating an economy of scale. There is no great science to that. However, with regard to refuges, I would handle that in one of two ways. I would either try to granulate the funding to work out which bit is for refuges and commission individually, in which case I have lost all the value of the economy of scale, or—I fear there is a growing trend towards this; there was when I finished last June—I might put my refuge provision into the general pot and explore dispersed tenancies rather than refuges as a way to house these people who really need help. There is energy in that direction not just in Nottingham but up and down the country, but it is very early days for that research, and I would not want to see a change here that makes that a fashion before we truly understand what it might mean. I certainly would not encourage that direction.

[Sir Graham Brady in the Chair]

We know what Women’s Aid says about the potential impact of the funding change: perhaps up to half of the refuges that responded to its survey may have to close or downsize as a result. We are talking about a high impact. There is a compelling case to extract the money nationally and for Ministers to commission a national network. That would get the economies of scale and give us joined-up provision. The excellent report, at conclusion 20, says that the Government should work with the sector to devise a new national model, and I wholeheartedly agree.

This pragmatic new Minister has a great opportunity. It is the perfect moment, because late this year we will be availed of two wonderful opportunities. The Government have already announced that by November refuge funding is to be reviewed, and by the end of the year we will see new domestic violence legislation, which Members across the House await enthusiastically. This is a great moment for the Government to grasp this issue, pull it out of the changes and wait for that moment at the end of the year, work with the sector as suggested and come out with a funded, planned and effective national network of refuges. I believe that is the moment we have arrived at. Two Select Committees, Women’s Aid and the domestic violence sector, more than 130,000 people via an online petition and so many others are urging Ministers to take that new course. If they do, I think we will get something truly valuable out of it. I commend the report and that change of action, and I hope the Minister will too.