Local Government Finance (Tameside and Oldham)

Angela Rayner Excerpts

Tuesday 23rd June 2015 Westminster Hall

[Angela Rayner (Ashton-under-Lyne) (Lab)]

I beg to move,

That this House has considered local government funding in Tameside and Oldham.

I want to use this opportunity to highlight the impact of the drastic and unfair cuts to local authority spending on local people and public services in my constituency. I also want to set out a better way.

Since 2010, the Government have cut cash funding to Tameside Council by just over 41%, forcing it to cut its budget by £104 million—more than half. The council has lost 1,700 jobs, almost half its workforce. A further £24 million in cuts is now set for 2015-16 and another £14 million for 2016-17. Together, that total of £142 million in cuts amounts to a real-terms equivalent of 53% of the total budget and more than twice Tameside’s council tax income.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I congratulate my hon. Friend on securing the debate and on her tremendous contribution since being elected. As a former Tameside councillor, I could say much about our local government funding settlement, but the fundamental point I wish to register is that we want local authorities to continue to be the deliverers of core public services—I do, and I think there is consensus for that. However, the local government settlement system for areas such as ours is simply not sustainable.

I believe there should be an incentive system—a way of rewarding councils for house building, economic growth and so forth—but there must also be a floor to ensure that vital, core public services are met. In Tameside, we are very close to falling through that floor.

[Angela Rayner]

I thank my hon. Friend for illustrating what I am trying to portray. Some fantastic councils up and down the country are facing genuine difficulties.

Oldham Council, which is also within my constituency, has done even worse than Tameside Council. It has been forced to cut £200 million from its public services since 2010—the second-largest cut in Greater Manchester. Taken together, my two boroughs have already lost from their public services more than £300 million—that is, incidentally, the annual cost of running the royal household.

Across Greater Manchester, local councils are making almost £450 million of cuts, which comes after 15,000 jobs were lost from our town halls after the last round of budget reductions.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I, too, welcome my hon. Friend as the Member of Parliament for Ashton-under-Lyne. Like my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), I served as a Tameside councillor before entering this place.

The situation is worse than the picture my hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) is painting, because such reductions in council spending have an impact on wider public services. For example, the cut in adult social care budgets has had an enormous impact on the ability of the NHS in Greater Manchester to deliver quality health services.

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[Angela Rayner]

My hon. Friend is absolutely right that the impact will be felt across all the public services, which are struggling with their own cuts.

Local government is facing the biggest challenge in its history. Spending as a proportion of GDP is forecast to fall from 4% in 2010 to less than 2.5% in 2019, according to the Office for Budget Responsibility.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I congratulate my hon. Friend on securing this important debate. One of the consequences of the cuts she is experiencing, apart from the fact that they are disproportionately affecting areas such as Greater Manchester while more affluent areas are receiving increases, is the long-term effect on life expectancy, about which there is a solid evidence base.

[Angela Rayner]

My hon. Friend is absolutely right. After five years of austerity, it is becoming increasingly difficult for well-run councils such as Tameside and Oldham to protect the most vulnerable from the impact of Government policies.

Demand for core services, particularly in social care—formerly, I worked in home care—continues to rise steeply, while funds are being drastically cut. Who will pay the price for the mismatch between the demand for services and the resources available to fund them? Will it be the 5,000 adult care service users in Tameside who have a physical difficultly, a frailty or a sensory impairment? Will it be the 4,000 people who use reablement services to help them live at home, or the people the council supports by providing nursing or residential care? Will it be the 1,300 mental health adult social care users, the 556 adults receiving learning disability services or the 410 vulnerable looked-after children in Tameside? What about the 1 million telephone callers to the council every year? Should staff just ignore the ringing phone, stop cleaning the 715 km of highways and footpaths every month, stop emptying the 45,000 wheelie bins and forget the 140 tonnes of street sweeping and the 290 tonnes of litter per month?

The Local Government Association believes that by 2020 the money available to fund some basic but essential council services, which we all rely on, will have shrunk by 90% in real cash terms. More than 60% of council spending will be on adult and child social care. Local authorities up and down the country are facing difficult choices.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

My local authority, Salford City Council, is in a similar situation: up to £4.7 million is going to be cut from adult services alone. Its Labour mayor has tried to limit the effect of such swingeing cuts by implementing the living wage and employment standards charter, supporting local people into work with free nursery care and raising £5 million from the proceeds of crime.

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[Angela Rayner]

My hon. Friend is right. I know her constituency well enough to realise that there is much more that unites us than divides us, not least on the issue of needing funds to provide basic services for our constituents.

Of course, not every local authority is facing the same agonising choices. Analysis by the all-party Local Government Association has shown that Labour local authorities have suffered average losses of £108 per person in spending power, while Tory councils have lost just £38 per head. Is that the Government’s one-nation Britain? Of the 50 worst-hit councils, 43 are Labour-run; of the 50 least-hit councils, 42 are Tory-run.

Even using the Government’s own carefully constructed figures on spending power, the unfairness is stark. Tameside has seen a 3.6% cut in spending power for 2015-16 alone—a cut of £74.77 for households in my constituency. Meanwhile, Oxfordshire’s spending power has risen by 1.3%, and Cheshire East’s has risen by 1.5%. Let us be clear: households in my constituency have lost almost £75 each, while households in Witney have gained almost £22 and those in the Chancellor’s Tatton constituency have become £25 richer. The number of food banks in Tameside has increased sixfold under a Prime Minister and a Chancellor who are busily feathering their own nests.

The Chancellor has announced a so-called stability Budget on 8 July, which will contain another £12 billion of cuts that will no doubt hit out-of-work benefits, disability allowances and personal social services. Inevitably, local government services will be hit once again.

The Independent Commission on Local Government Finances said today that councils are already at a cliff edge, which means that everyday services may not exist for much longer. People who depend on council services are already teetering on the edge of that cliff, and the Chancellor’s so-called stability Budget will push them over.

Tameside Council is forecasting that £4.5 million of cuts will be made to social care by the Chancellor’s stability Budget. Cuts to benefits would add another £4.5 million of extra pressure on council services. One cannot be taken without the other. Those cuts come on top of the £1 million cuts to public health services already announced in Tameside. The total in-year cut for Tameside will be up to another £10 million, and the situation in Oldham is exactly the same.

We are not alone. Sheffield Hallam University estimates that the Chancellor’s £12 billion of welfare cuts will take £5.2 billion a year out of the pockets of families in the north. Coincidentally, almost the same amount is lost in tax evasion every year. I look forward to the Tories pursuing multimillionaire tax avoiders with the same fervour as they are punishing poor working people, but I am not holding my breath.

I have no doubt that Tameside and Oldham Councils will continue the difficult work of managing the cuts and tackling the enormous challenges they face, but I fear that, for all their best intentions, many local people will inevitably suffer. There has to be a better way. I know that many Government Members genuinely believe in local democracy and local government, and will join me in congratulating Tameside, Oldham and many other local authorities for their work in stimulating private-sector investment, creating decent jobs, providing strong civic leadership, innovating services and being prepared to do things differently.

All that is at risk if local government services continue to be the whipping boy for austerity. That is why we need a new settlement for local government in our country. Devolution and more local decision making will undoubtedly play their part and I welcome the progress made, particularly in the development of the northern powerhouse. However, devolution is only part of the answer; in itself, it will not solve the funding crisis and cannot be used by central Government as an excuse to transfer responsibilities.

[Rebecca Long Bailey]

My hon. Friend shares my keen interest in the devo Manc proposal. In light of the facts she set out, there is concern—among northern MPs, in particular—that Ministers see it as a chance to palm off the blame rather than hand down the power. Does she agree that, whatever the final shape of local government in Manchester, resources much match responsibilities?

[Angela Rayner]

Once again, my hon. Friend hits the nail on the head. She anticipates my next point. If the northern powerhouse is to succeed, it cannot be used as a Trojan horse for more cuts. There must be a fairer settlement for local government: a settlement where reductions in spending do not fall on the most vulnerable in society and the places where they rely on a strong public sector; that puts public need first; that takes a place-based approach to finance, ending the madness whereby cuts to preventive local government services only fuel increasing demand for more expensive NHS treatment; and that helps to cut the appalling gap in outcomes between the most affluent and most deprived areas, ensuring that everyone has an equal chance to get on in life, regardless of where they started.