Funding for Local Authorities

Annette Brooke Excerpts

Thursday 10th October 2013 Commons Chamber

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I find myself agreeing with the hon. Member for Sheffield South East (Mr Betts) on a large number of his points. I am particularly pleased that he likes local income tax and the mansion tax. We clearly have a lot in common. Perhaps future campaigns will be a little different.

I have a quote on local government: “Local government is looking over a precipice. We will only be able to run statutory services such as adult social care and waste services.” That comes from a Liberal Democrat council leader, but it could have come from a local council leader of any party. We must consider that view—from the precipice or cliff—against the view that it is scaremongering. We need clarity. What is the true position? Every hon. Member who has spoken has identified the lack of transparency in the system, and I shall return to that point.

As hon. Members know, local government accounts for around 25% of all public expenditure. Given that the budget deficit had to be tackled, that was always going to take a big hit from cuts to public expenditure—I am on message now. Local government has shown great skill in reducing budgets. Committed local authorities under all parties have protected front-line services. I should like to put on the record that that is a credit to many councillors throughout the country, particularly given that satisfaction in council services has increased. Many hon. Members were surprised to hear the result of the research reported on the BBC showing that most voters believe that schools, bus services, parks, libraries and bin collections have improved in the past five years even as budgets have been reduced. Credit must be given where it is due.

Many hon. Members have mentioned bus services. I remind the House that I represent a constituency that has every type of council within it—there is a unitary authority in an urban area, and a county council and several district councils in the rural part—so I find it difficult to argue that one area needs more money than another for specific services; it is a difficult situation. Currently, the county council is consulting on the future of bus services, and it is possible that some of my constituents in villages will not be able to get to work or to access health or leisure services. The price of school transport has rocketed in price for the over-16s. That is compounded by the rising age of participation. I shall keep making the point on the Floor of the House that relatively poor hard-working families in the rural areas in my constituency are faced with bills of £450 or £750 per year for their 17-year-old to get to school. Members on both sides of the House have been remiss in allowing the age of participation to increase without putting finance in place for bus services. I urge all Departments— the Department for Education, the Department for Communities and Local Government and the Department for Transport—to talk about that together because it is so important.

Apart from cuts to rural bus services, I am faced with cuts in the urban area on routes where the buses are well used. The bus companies simply take the decision to cut the routes off without consultation, which is shocking. There seems to be no accountability. As far as I can tell, bus grants have been maintained. Some decisions are a ploy to ask for money from the local authority, but some are taken because the bus companies are not there to provide a service for my constituents.

[Ian Mearns]

The hon. Lady makes telling points, but I remind her that, in debates prior to the abolition of the education maintenance allowance, we warned Government Members that there could be implications down the line for people in rural areas.

[Annette Brooke]

The hon. Gentleman might recall that I spoke against scrapping the EMA because I was concerned about the impact on sixth-form choice when there is insufficient help from other services. That needs to be addressed. We have bursaries, but I thought the EMA should be reformed. I do not believe that there is enough support, particularly given the increase in the age of participation. I certainly welcome the fact that the Government reviewed the situation and put extra money into schools and colleges to help the most needy, but there is not enough money to cover the current situation, especially in rural areas.

In June, the spending round announced a further 10% real-terms reduction in core local government grant funding. The LGA analysis of the subsequent consultation covering the settlement funding assessment showed that money received up front will be reduced by 15% in real terms. The Government frequently use the figure of a 2.3% cut for 2015-16. They give the impression of a certain level of cuts, but it is all much more complex. We are told that local government will get extra money for health and social care, but then we discover that that is not all new money. We know there is top-slicing and the extra top-slicing. Councils have the opportunity to bid for lots of different pots of money, but that causes great uncertainty at a time of financial difficulties.

We have had some good news, which I notice Opposition Members have so far not mentioned, such as city deals and growth regions, which will put extra money and opportunities into the core cities outside London. That is exciting decentralisation work, and we must give credit for that important work.

Local government faces both opportunities and threats, although some opportunities can also be seen as threats. The freeze in council tax, and the extra money from the Government to support that, has been an opportunity for local councils in some respects, and I welcome the fact that residents in some of the councils I represent have benefited from the council tax freeze. On the other hand, the freeze removes democratic freedom, which is not a good thing.

A further big opportunity can be found in the merging of health and social care budgets, which is an enormous step forward of which the Government can be really proud. But no council knows how much money it will get back for social care. How can councils plan or operate in a business-like fashion if they do not have that certainty? One of the biggest threats has to be the escalating cost of adult social services. I represent an area with an ageing population, and local government has to be given enough support to bring health and social care budgets together to innovate. Local government has not been backwards in innovating over time—I think it has been the most innovative part of government—but the Government should work with local government to ensure that we bring out all the opportunities that are available.

I agree with hon. Members that top-slicing the new homes bonus is a threat. Allocating that money to a local enterprise partnership is an issue. I am quite in favour of LEPs, but they do not have any democratic foundation. If an LEP covers an area with several councils—a county council and two unitaries, for example—the small district councils that will lose their new homes bonus do not have a seat on the board, because they cannot all have seats on the board. I would like the Minister to address that problem. We have opportunities and we have threats, but it is the Government’s role to support councils in getting achievements from those opportunities.

The rural fair share campaign has been mentioned. I support the campaign and I know the struggles my small district councils have in order to survive, but it has to be part of a bigger re-examination of local government finance. However, it was great to get some movement and support on the problems we can all identify, regarding the extra costs of running a rural authority.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

I am grateful to my hon. Friend for her support for the rural fair share campaign. One of the problems is that the Government are looking at local government finance, but they are freezing in, not just damping, the inequities that see people in rural areas, who earn less on average than people in urban areas, pay more in council tax and receive fewer services: 50% more goes per head to urban areas than to rural areas. That cannot be frozen and kept in place at a time of change; it must be unwound, and there must be other reforms.

[Annette Brooke]

I congratulate the hon. Gentleman on the work he has done in leading on this issue. All types of councils have their problems. This is a strong issue, and when there is a problem it does not help to build it in—the whole situation has to be opened out. I mention in passing the concern of parish councils and what will happen to their funding with regard to the local council reduction scheme. Perhaps the Minister will update us on that. I remember attending a meeting with parish councils when the Minister was answering questions on that matter.

In conclusion, local government is facing a tough situation and that has to be accepted. I agree with the hon. Member for Sheffield South East that we should look at what local government does best, pulling local government services together and providing greater opportunities to bring more services together. We believe in localism; let us enable localism to happen. By supporting local initiatives, so much more can be delivered. I agree that local government borrowing that complies with prudential rules should be facilitated. That is a fundamental principle. I want to see more services delivered by local government, not fewer—for there to be a bigger range, with better quality and other services facilitated. Sometime it is right to bring in the voluntary sector, but I agree with my hon. Friend the Member for Newton Abbot (Anne Marie Morris), who made the point that we cannot delegate everything to the voluntary sector.

I hope the Minister will listen. There is a problem. Let us recognise it and support local councils to do what they do best.

[Several hon. Members]

rose—