Local Government Financing

Andy Slaughter Excerpts

Tuesday 29th June 2010 Commons Chamber

[Mr John Denham (Southampton, Itchen) (Lab)]

Force of habit, Mr Speaker.

I beg to move,

That this House regrets the decision of the Government to introduce £1.165 billion of cuts to local government funding in England in the current financial year; regrets the Liberal Democrat members of the Government supporting cuts they opposed during the general election campaign; notes the promise in the Coalition Agreement to “ensure that fairness is at the heart of those decisions so that all those most in need are protected”; regrets that this programme of cuts fails to meet this test of fairness, as they fall disproportionately on the hardest-pressed communities; notes with concern the principle set out by the Parliamentary Under-Secretary of State on 10 June that “those in greatest need ultimately bear the burden of paying off the debt”; condemns the failure of the Secretary of State to tell the House or local authorities where £504 million of cuts to funding will fall; further regrets the failure to consult local government on the allocation of the cuts; further notes with regret that the Government’s further decisions on the Future Jobs Fund, housing and support for neighbourhood policing will weaken the ability of local councils to shape and deliver services in their areas; regrets the failure to make any progress on implementing the previous administration’s commitment to Total Place, enabling local authorities to deliver real efficiency savings and contribute to reducing the deficit while protecting frontline services; and resolves that decisions affecting local government spending should be based on the principles of fairness, protection of frontline services and promotion of growth.

I was interested to hear the earlier exchanges about Ministers not turning up for debates. May I say how disappointed I am that the Secretary of State for Communities and Local Government has not bothered to turn up for this one? In 10 years as a Minister, I always respected the strong convention in the House that if a shadow Secretary of State chose to lead an Opposition day debate, the Secretary of State would respond. I am very disappointed that, on the first Opposition day debate on a Communities and Local Government topic, the Secretary of State could not be bothered to be here. The truth is, of course, that he is too scared to be here. He is too scared to explain the series of blunders that he has already made over these cuts. He is so scared of defending what he is doing that he prefers to treat the House with disdain. So we shall have to make do with the Minister for Housing, the right hon. Member for Welwyn Hatfield (Grant Shapps) instead.

I remember when my right hon. Friend the Member for Wentworth and Dearne (John Healey) and I insisted that building firms who took public money to build social housing should train apprentices. When they did so, the current Minister described it as ludicrous and counter-productive. We have all seen the minutes of his meeting with the Prime Minister’s adviser on local government, the leader of Hammersmith and Fulham council, at which it was agreed that it was a priority to raise rents in the social sector to equalise those between social housing and the private sector. So we know where he is coming from—he has got form.

[Mr Andy Slaughter (Hammersmith) (Lab)]

I have something of an interest in what goes on in Hammersmith. I heard the Minister for Housing say from a sedentary position that he was not at that meeting. Perhaps he would like to clarify that, because my understanding is that he was not at the main part of the meeting, discussing the demolition of council estates and the ending of social tenancies—although he has learned the lesson and is now proposing to do just that—but he did get there for drinks and canapés at the end.

[Mr Denham]

My hon. Friend makes a good point. Indeed, he owes his re-election to the awareness of his constituents of exactly what the Tory agenda for local government was in his constituency. I will return to that point later.

--- Later in debate ---

[Grant Shapps]

I am grateful to the hon. Gentleman. We are not going to set targets because they did not work. [Interruption.] There you go—they have heard it. We all remember the target of 3 million homes by 2020. Remember the former Prime Minister standing at this Dispatch Box and announcing that target? We all remember the 240,000 homes that were to be built every year. What is the figure for house building this year? Probably about 110,000 to 118,000—something in that region. There is no point in announcing targets that do not happen; all that does is bust aspiration. Instead, we will take a practical approach in which communities are encouraged with powerful financial incentives to build homes. Our matching of council tax revenues for a six-year period will achieve a great deal of that.

[Mr Slaughter]

rose—

[Grant Shapps]

I want to make a bit of progress, then I shall give way again.

We are going to drive economic growth through local action and initiatives such as the incentive plan, and by replacing Lord Prescott’s and Lord Mandelson’s regional development agencies with locally led partnerships, based on natural economic areas—not arbitrary Government offices for the regions that happen to suit Ministers. We will also drive growth by giving councils new powers to levy business rate discounts for local shops and firms, by finding practical ways to introduce automatic small business rate relief and by abolishing Labour’s unfair ports tax, which threatened to harm the entire manufacturing sector in this country—at least the bit that the party had not already harmed through its economic policies.

We are doing all we can to help local government under difficult and pressing circumstances. No local authority will face a reduction of more than 2% in any revenue grant that has already been allocated.

--- Later in debate ---

[Grant Shapps]

I am most grateful to my hon. Friend, who gives us an opportunity to talk about matters such as the comprehensive area assessments, which somehow, through ticking boxes and using—[Interruption.] The hon. Member for Hammersmith (Mr Slaughter) says from a sedentary position that we have done all that, but the truth is that £39 million was still being spent on that budget on the day we entered office.

Rather than having a tick-box culture, in which town halls are answerable to Ministers, there is a better way, and it is the one that my hon. Friend the Member for Great Yarmouth (Brandon Lewis) has identified—local people being the ones to whom officers are answerable, through the ballot box. That is a radical concept that can be expanded much further by allowing councils, by the end of this year, to publish online details of all their spending, tenders and contracts over £500. That will be proper transparency and empower a new army of armchair auditors to go through local authorities’ books and help identify wasteful spending, helping to protect front-line services. [Interruption.] I hear Opposition Members calling out, “Well, that will help.” As a matter of fact, we really do think that it will help in a dramatic way, and I will explain why.

We are going to extend the idea to national Government with a higher limit of £25,000, and this is how it will work. In my Department alone, openness and publishing this stuff online would have avoided, for example, the scandal of £134,000 being spent on 28 luxury socialist-red sofas by a Parisian designer, Ronan and Erwan Bouroullec, which were bought as part of new Labour’s—get this—efficiency initiative. That pretty much sums up its approach.

Transparency would, I imagine, also have stopped the scandal of my Department spending £73,000 on a serene green tranquillity room for stressed-out staff and Ministers to

“relax and refuel in a natural ebb and flow.”

Proper accountability would surely have stopped the £6,000-apiece deluxe chrome coffee machines fitted at each of the white elephant regional fire control rooms, which are completely empty, by the way. Come hell or high water, we would at least have known in future that officials would have had a nice cup of cappuccino even as disaster struck and the phone system failed, as it famously does in those buildings. That is what transparency and openness will deliver—it will mean that people can see what is going on inside government, both nationally and locally.

[Mr Slaughter]

I wish the Secretary of State had bothered to come, partly because this is so incoherent and we might have had something a bit better, but mainly because I wanted to pay him a compliment for proposing to cut a bit of town hall waste. He said at the weekend:

“Councils should spend less time and money on weekly town hall Pravdas…our free press should not face state competition from propaganda on the rates dressed up as local reporting”.

My Conservative council spends £750,000 on just that type of propaganda. When will the Government cut that, and in addition to consulting the councils themselves, when will they consult local people, MPs and newspapers about the problem? It is a disgrace.

[Grant Shapps]

I thank the hon. Gentleman for his particularly eloquent contribution. Local authorities spending their time publishing weekly newspapers, or weekly Pravdas as the Secretary of State described them, is just not their role. We talk about front-line services, supporting people, homelessness and priority programmes to ensure that the sick, elderly and vulnerable are protected, but Opposition Members want to talk about local weekly Pravda newspapers published by local authorities. It simply is not the answer. What we want to do is ensure that local authorities are engaged in front-line services that help their population, not services that rival the local newspapers. We want to allow the local newspapers to operate without interference from local authorities.

Everyone knows that money is tight. Every strategy that we employ nationally and locally should focus on getting more for less. Innovation and efficiency must be king. The emergency Budget makes it clear that there are challenging times ahead. We want to ensure that local government is fully engaged with the next spending review. In particular, we expect councils to be involved in the series of events over the summer to discuss and debate various aspects of public spending. We will use the spending review to drive decentralisation across local government and national Government.