Local Government Finance

Debate between Andy Sawford and Louise Ellman

Wednesday 12th February 2014 Commons Chamber

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Local government is important to everyone. It is about improving people’s quality of life, developing potential, protecting the vulnerable and supporting communities. That is why the Government’s attacks on local services are so destructive. When the severest financial cuts are made on the poorest, that is grossly irresponsible. I listened with horror to what the Chairman of the Select Committee told us: the Government have now admitted that they are no longer concerned about protecting the vulnerable and are more interested in protecting the rich—that is outrageous.

It is completely unacceptable that Liverpool, which on the Government’s own figures is the most deprived local authority in the country, has suffered the deepest cuts yet again. Liverpool will suffer drastic cuts in spending power this year and it will suffer them again next year, with its funding slashed by another 5.4%—£32 million—which is the equivalent of £148 a household. By contrast, Surrey Heath is facing cuts of £73,000—a mere 0.1% cut. That is an indication of where the Government’s priorities lie. In real terms, Liverpool’s funding has been cut by 52% since 2010, and the figure is likely to reach 58% by 2016-17. As 76% of Liverpool’s finance for local services comes from central Government, in recognition of the city’s needs, the cut will be devastating.

I was appalled to hear the Minister state at the beginning of this debate that he regarded that support as a handout. I call it justice; it is about recognising need. He sees supporting deprived communities as giving a handout, which he is rapidly withdrawing. It is an absolute disgrace, and I am pleased that he has put that on the record in this debate today. The reality for Liverpool is that services such as nurseries, care for the under-fives, social care for the vulnerable, which includes 5,000 care packages, library, regeneration and youth services will all be at risk. Whatever spurious lines he tries to go down, the finger of blame will be pointed clearly at the Government who will be responsible.

I noted that the Minister attempted to divert this debate by talking about Liverpool’s reserves. Those reserves are held because they are legally required to be held, mainly on behalf of schools. Furthermore, despite the devastating blows to local services coming from this Government to the city of Liverpool, the council and its mayor are responsible people and they are determined to maintain the city’s finances in a prudent manner, and they will not deviate from that.

[Andy Sawford]

My hon. Friend makes an incredibly important point about Liverpool’s reserves, which we calculate are equivalent to one month’s operating costs for Liverpool council. That is a prudent level of reserves. Perhaps, it wants more reserves in order to have some sustainability given the context that she is powerfully describing.