Local Government Financing

Baroness Morgan of Cotes Excerpts

Tuesday 29th June 2010 Commons Chamber

[Hazel Blears]

My hon. Friend has made the extremely important point that despite what some Government Members have said, the working neighbourhoods fund is a long-term programme that is beginning to get results. We are seeing from the evaluation that it works in an intensive, neighbourhood-focused way and is getting people from some of the most difficult cases of intergenerational unemployment back into work. What do we see now? We see a Government who profess to want to reform the welfare system and get people back into work cutting the very programmes that can succeed in our communities.

[Nicky Morgan (Loughborough) (Con)]

Perhaps I misheard, but I thought the shadow Secretary of State said earlier that if his Government had been returned, there would have been £40 billion of cuts from their side of the House. Would any of the schemes that the right hon. Lady has just mentioned have been affected, or would other schemes, on which people also rely, have been cut instead?

--- Later in debate ---

[Nicky Morgan (Loughborough) (Con)]

Thank you, Mr Deputy Speaker, for inviting me to speak in this debate. First, I join other Members in congratulating my hon. Friends the Members for Wolverhampton South West (Paul Uppal) and for Dudley South (Chris Kelly) on their very fine maiden speeches.

What we have heard from Labour Members throughout the debate has been a reinvention of the past 13 years. They have talked about a number of schemes that are desperately important, very much needed, and must be funded, many of which, I am sure, have been very welcome and have done sterling work. However, the question is: where was the money going to keep coming from? At the front of the Red Book, there is a stark chart showing that for 2010-11 Government receipts were to be about £578 billion and Government spending more than £600 billion. That is unsustainable even in the short term, and that is why this Government are having to take the very tough decisions that have been discussed at great length today.

The hon. Member for Penistone and Stocksbridge (Angela Smith) talked about decent homes funding. I would like her to explain to my local arm’s length management organisation, Charnwood Neighbourhood Housing, why it thought that it was going to be bidding for decent homes funding and then found that that money had been diverted to build more social housing. I do not disagree that more social housing may be needed, but that was another example of game changes in the middle of the year, about which Labour Members have complained so bitterly.

The hon. Member for City of Durham (Roberta Blackman-Woods) talked about free school meals. Perhaps she could explain to a constituent who recently wrote to me about this why she and her husband, who are still together, struggling on a low income, and who really need free school meals for their children, are unable to get them, while children of parents who have split up, with at least one parent certainly able to afford school meals, are getting them.

[Angela Smith]

May I remind the hon. Lady that the free schools meals pilot was about giving them to all children?

[Nicky Morgan]

That brings us back to the point that my hon. Friend the Member for Sherwood (Mr Spencer) made about bureaucratic schemes, in many of which the help is not getting to the people who actually need it.

This has been an interesting debate, and it was particularly interesting to listen to the three former Secretaries of State and the former Housing Minister on the Opposition Benches. I feel I should declare that I have never been a councillor, and I have learned a great deal about local government finance this afternoon, not least all the acronyms. I speak in this debate as a council tax payer, and I agree that local government is incredibly important. For many people who have come to my surgery so far, their experience of government comes from dealing with local government, whether through the administration of benefits, council tax, rubbish collection, social services or particularly education, the funding for which I shall come on to in a short while. The Local Government Association has said that town halls have already committed to making 4% efficiency savings this year, so they are leading the way where the former Government failed to do so.

As I mentioned in an intervention, one of the former Secretaries of State said that Labour had identified £40 billion-worth of cuts, but we do not know where those cuts were to be made. I believe that everybody in the House agrees that cuts have to be made. The former Housing Minister, the right hon. Member for Don Valley (Caroline Flint), talked about progress having stalled. I suggest to her and other hon. Members that progress stalled when the former Government ran up a deficit of £156 billion, which will lead to £70 billion of interest being paid—more than the budgets for education and many other things put together.

There has been little mention of council tax levels—although since I scribbled a note saying that, council tax has been mentioned. The level has increased, and in fact in Charnwood it more than doubled in the 13 years of the Labour Government. That has hit those on fixed incomes, particularly pensioners, very hard. I was approached by many pensioners during the election campaign who talked to me about how they were struggling to make council tax payments on a fixed income.

There has been talk this afternoon about ring-fencing. I welcome the fact that the Government have scrapped £1.7 billion of ring-fencing and got rid of the comprehensive area assessment, and that the £29 billion formula grant remains intact. Talking of the comprehensive area assessment, councils across Leicestershire used to employ 90 full-time staff to prepare 3,000 individual data items, leading to 83 inspections at a cost of £3.7 million a year. I defy any hon. Member, particularly any Opposition Member, to tell me that that could not be better spent on front-line services.

I am conscious of your exhortation not to speak for too long, Mr Deputy Speaker, but I wish to make two more points. First, we have heard a lot this afternoon about decentralisation, and I particularly welcome the Government’s first move to abolish the regional spatial strategies. That is a huge step forward and has been welcomed enormously by my constituents. They recognise that new houses need to be built, but they are incredibly concerned about where they are to be built. It is welcome that elected local councillors will make decisions about that.

I agree entirely with what the right hon. Member for Salford and Eccles (Hazel Blears) said about the need for creativity and innovation in the delivery of services. That is absolutely right, and there has been too much overlap between what central and local government do. I am sure that we all have talented councillors in our constituencies, and many Members have spoken about their local government experience. Talented councillors and staff do not need Whitehall and central Government breathing down their necks.

I am sure I am not the only Member who is happy to say that they do not want to say too much about local planning matters, particularly when they boil down to extensions here or there, and so on. I am happy, and believe it is right, to leave it to the local planning authority and planning committee members to decide on such matters. This Budget provides an opportunity to reinvigorate local authorities by allowing our local councils really to take charge of local issues. I wish to make a plea to the Government and the Minister, however. I am concerned about recent changes to legislation on the conversion of houses to HMOs—houses in multiple occupation. Although I welcome the fact that local authorities are to make decisions on that, as they know their local areas best, if they are to do so they need regulations that have teeth. In my constituency, the conversion of houses into student-occupied homes is a matter of real concern.

Total Place has been mentioned this afternoon. I am not an expert, but I know that in Leicester and Leicestershire, Total Place has been considering drug and alcohol treatment. It is a huge step forward, which is to be welcomed, and I endorse comments from hon. Members of all parties about the way in which Total Place has worked. I hope that it will continue.

The trouble with speaking late in a debate is that other hon. Members often steal one’s thunder, and my hon. Friend the Member for North West Leicestershire (Andrew Bridgen), who is no longer in his place, did that effectively when he spoke about spending on education in Leicestershire, so I will not say too much about that. However, I left the Chamber earlier to meet some schoolchildren from De Lisle school in Loughborough. When I told them that I hoped to speak in the debate, they immediately asked what I would say, and I said that I would talk about funding for education in Leicestershire. My hon. Friend the Member for North West Leicestershire pointed out that the funding gap between schools in Leicester and in Leicestershire is now £600. The trouble is that there is no difference in national pay rates for staff, so schools in Leicestershire have less to spend on other things if they rightly want to retain a decent staff-pupil ratio. They were penalised when the direct support grant was introduced because Leicestershire had topped up school funding. The difference between average funding in the country and that for our schools in Leicestershire meant that a 300-place primary school in Leicestershire would be £99,000 worse off every year. That cannot be right.

My hon. Friend the Member for North West Leicestershire also mentioned police funding. In Leicestershire, we have received £9 million less than the average in the past four years. Despite all that, Leicestershire county council still managed a four-star rating. That shows that, with good management and good political leadership from councillors, local authorities can run services to a high standard on less money than they would ideally like.

I support the amendment. The Opposition have totally reinvented and forgotten the past 13 years, and all the projects and schemes that have been mentioned. The Government are now taking tough decisions, which mean that, in several years, we can fund our services fully, and help the vulnerable and the poor who have been mentioned in today’s debate.