Local Government Finance Settlement

Baroness Donaghy Excerpts

Thursday 22nd January 2015 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, it is a pleasure to follow the right reverend Prelate the Bishop of Southwark in this debate. If he is half as relieved as I was when I completed my maiden speech, I know something of his feelings at the moment.

The right reverend Prelate was an assistant curate at Sandhurst and, as has been said by the right reverend Prelate the Bishop of Portsmouth, a senior curate in the Diocese of Portsmouth in his early career. With his having covered the Army and the Navy, I wonder when the Air Force will benefit from his talent.

The right reverend Prelate’s interests, which he has already outlined, include urban affairs, and that was very clear from his contribution. He is very active in promoting retreats and pilgrimages, as well as in chairing the Zimbabwe round table and pursuing deaf/hearing integration. He is a man of many parts indeed. As a resident of the Borough of Southwark for the past 35 years, I thank the right reverend Prelate for his contribution. I am sure that the House looks forward to his thoughtful and moving contributions in the future.

I believe that this is the fourth occasion on which I have taken part in a local government finance debate, and I thank my noble friend Lord Beecham for making it happen. Looking around, I see that the usual suspects are in the Chamber today, plus one or two distinguished additions. It feels like being a prisoner in a gulag where we are hunched up against the cold and then, once a year, we lift our heads out of our mufflers to acknowledge each other and renew our dedication to the cause of local government. It is a chilly environment indeed.

One could summarise the present situation by saying that it is the same as in the previous four years, only worse—a redistribution of wealth from the poorest to the better off. It is disproportionate compared with other public service cuts. It is done in the name of deficit reduction, yet the deficit is not reducing. It was first announced in June 2010 that the Government’s deficit reduction programme would be for six years; now it appears that we are only half way through a nine-year programme of austerity. Does that mean that the sacrifice of local government, amounting to a 37% reduction by 2015-16, was really in vain?

Reductions in services to the vulnerable elderly and children, increased bills for the working poor and a general diminution in the quality of the environment and the arts do not make headlines. Reductions in the numbers of police, firefighters and local government officers do not make front-page news either, unless something goes wrong. The cuts in social care and the closure of residential homes have a direct impact on the National Health Service, which does make the national news. The NHS is under attack from some in the press, when much of the problem can be laid at the door of the social care crisis.

Noble Lords will be aware that the Children’s Society, among others, campaigned to retain DWP funding for local welfare provision. That has already been comprehensively covered by my noble friend Lord Beecham and the right reverend Prelate the Bishop of Portsmouth, so I will not go into detail as I had intended except to underscore that the local welfare assistance schemes cover the most vulnerable in our society: families under exceptional pressure, people with disabilities, lone parents, young people and victims of domestic violence. How is real need to be met, given the funding gap that is forecast to increase at an average rate of £2.1 billion per year until 2019-20, when it will reach £12.4 billion?

I turn to council tax. The reduction in government funding will leave councils facing unpalatable choices to increase council tax bills for some or all, and to further reduce other council budgets. The Parliamentary Under-Secretary of State for Communities and Local Government, Kris Hopkins, said in his Statement on local government,

“Councils facing the highest demand for services continue to receive substantially more funding”.—[Official Report, Commons, 18/12/14; col. 1590.]

The position on the ground is the exact opposite, and the cumulative impact of the reductions will be felt for a generation.