Local Government Financing

Andrew Percy Excerpts

Tuesday 29th June 2010 Commons Chamber

[Mr Denham]

This is an important debate. The way in which the Secretary of State is handling these first cuts warns us all of what lies ahead and the unnecessary damage that will be done to the local services on which the people we represent rely. When he made his cuts, he had choices to make about how to make them—to make them fairly, or not to make them fairly. So let us remember the promises that the right-wing coalition made:

“We are all in this together. I am not going to balance the budget on the backs of the poor”,

said the then shadow Chancellor, now the Chancellor of the Exchequer.

“Our core aim is to hard-wire fairness back into national life”,

said the Deputy Prime Minister during the election campaign. The right-wing coalition document states that

“we will ensure that fairness is at the heart of those decisions so that all those most in need are protected.”

So what did the Secretary of State do?

Let us take two boroughs next door to each other in the same conurbation. One is 15th in the deprivation index; the other 178th. One has 27,000 people on housing benefit; the other has 13,000. One has 11,000 unemployed people; the other has 8,000. One has an average weekly income £40 below the other. One is poor; the other comfortable. So what does “We are all in it together” mean? Which one gets the bigger cut under the right-wing coalition? The poor one, of course! Salford loses twice as much as Trafford. And that is not an isolated example. According to the Secretary of State’s own figures, Newham, the sixth most deprived borough in the country, loses £4.6 million, while Richmond, the 309th most deprived borough, loses less than £1 million. In the Prime Minister’s district council, there will be no cut. His county of Oxfordshire, which has a deprivation index of 10.85, gets a cut of 0.7%.

If we look at the Deputy Prime Minister’s area, we see that Sheffield has a deprivation index of 27.8 and a 1% cut—perhaps the real price of coalition. As for the councils losing the highest proportion of the their income, they are in places that have been left behind—the Lancashire mill towns like Burnley, the ex-coalfield areas like Ashfield and the struggling seaside towns like Hastings. Among the metropolitan boroughs, it is the poorest that lose most. Why? Because it is what these Tories and Liberal Democrats believe in. As the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill)—who I see is not here to answer this debate either—said at oral questions with refreshing honesty:

“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]

The poor will pay most, and that is what this right-wing coalition is all about.

[Andrew Percy (Brigg and Goole) (Con)]

The right hon. Gentleman cannot honestly defend the previous funding regime that saw authorities such as mine in East Riding receive hundreds of pounds less per pupil than those in neighbouring Hull. Is he suggesting that he wants to have cuts dished out to authorities that are already disproportionately doing badly out of the funding, which would mean deprived pupils in my area doing even worse than deprived pupils in neighbouring authorities?

--- Later in debate ---

[Grant Shapps]

I am grateful to the hon. Gentleman for that, but district councils all over the place are taking larger cuts. If the Opposition are now going to spend their time looking at random distributions, trying to pick out patterns and then playing them back, I am afraid that that just demonstrates that they really have not got it. They have not understood the financial crisis in which they had taken this country right to the edge, or appreciated the depth of the problems that they had taken the country into. That is clearly demonstrated by their input today.

[Andrew Percy]

The Minister will recall that a few moments ago, when I tried to raise the issue of school funding, my concerns about deprived areas such as those in Goole that I represent were laughed off with some smugness by Labour Members. Can we have an assurance that unlike the situation under the previous Government, who simply ignored the problem, pupils who live in very deprived areas in Goole will not be penalised for the simple reason that other parts of the East Riding are wealthier?

[Grant Shapps]

I am grateful to my hon. Friend. Of course, the pupil premium is designed to achieve precisely that. We are absolutely doing everything we can to try to protect people and share out the burden of the very difficult decisions that have to be made—decisions that were ducked by the Opposition when they were in government. Labour Members could not outline one penny of how they would have reduced the local government budget—not one single penny. I invite the right hon. Member for Southampton, Itchen to come to the Dispatch Box if he now wants to explain where the cuts were going to come from. Until Labour Members acknowledge that they had no answers and were not proposing alternatives, they will not have earned the right to lecture anybody about what should and should not be done by way of making these difficult cuts, because we have not heard anything about it from them.

We have protected the £29 billion formula grant—the main source of funding for front-line services such as rubbish collections, street cleaning and libraries. Moreover, we have not cut any of the main Supporting People budget, which is in excess of £1.6 billion, despite needing urgently to cut funds from this year.