Local Government Funding

Bill Esterson Excerpts

Monday 6th December 2010 Commons Chamber

[John Woodcock]

I was getting worried, but thankfully there was a question in the last six words of that diatribe. Of course, as hon. Members would expect, I shall go on to talk about the particular difficulties that Barrow borough council will face in the months and years ahead. No one is suggesting that pain will not be felt right across the country. I have to say to the hon. Gentleman that, although every council knew that we were approaching difficult times for continued funding, local authorities have not been given enough time to plan for the front-loaded cut that it seems will be imposed on them. Such an approach will cut into areas that it would not have been necessary to cut if the process had been more spread out.

[Bill Esterson (Sefton Central) (Lab)]

On front loading, Sefton council is facing £38 million of cuts in year one, which will decrease to £16.7 million in year two and £3.8 million in year three. It has been a hung council for 24 years and local councillors of all parties are used to working closely together and resolving such problems. However, they are now finding it incredibly difficult to do so. I hope that the Secretary of State will take on board the challenges that such councils are facing as a result of front-loading.

[John Woodcock]

My hon. Friend makes a very good point. His remarks illustrate that, with the top slicing of the formula grant and if the cuts are front-loaded—the Minister is welcome to make the announcement about that today and end the speculation—it will pretty much guarantee that the most deprived areas of the country, which most rely on extra support, will bear the greatest burden of the cuts.

--- Later in debate ---

[Siobhain McDonagh]

Perhaps now I should take the opportunity to explain to the House and the hon. Gentleman just why I am not sure that my local residents will feel exactly the same way. Most Members will not have heard of my local council—Merton. It is a quiet, low-profile London borough. It is not the poorest or the most exciting. It generally gets on with it, whether it is Labour or Conservative-run. It is a council that likes to sweep the streets, collect the rubbish and look after people as best it can. Its services are not perfect and could improve, but most of the time it does its best. I suggest that the same applies to most of the councils represented by hon. Members.

Merton council needs time to change and to get about sharing services, but that time does not exist if those spending figures are to be released next week. Next week, we will learn the figures and by 5 March my council has to say what its budget is for next year. If I know anything about local government, it is that huge reforms are not brought about in three months.

Merton council will have to make cuts of £24 million this year—that is for the cuts it anticipates and those it will have to make because of an expanding need for services, such as school places and care for the elderly. That is £24 million out of a budget of £150 million. The people on that council are not people who squeal and they are at a meeting tonight just trying to get on with it, but how will they do this? They have already identified £10 million of cuts this year, which is the largest figure ever at this point in a financial year for the next. They hope to get to a figure of £14 million by January, but the following £10 million will be really hard to find.

[Bill Esterson]

rose—

[Siobhain McDonagh]

I cannot give way, because I do not wish to take up too much time—I hope that is okay. The people on the council are finding that task hard, not because they do not want to do it and not because they do not want to bring about shared services, but because they cannot do it in the time available. As they seek to cut that last £10 million, the only opportunities left for them are to go for public services, for the voluntary sector, for the youth service—even though they do not want to do so—for personal care for elderly and disabled people and for the costs of special needs transport. That is because those areas are traditionally where councils have gone when they need to make cuts quickly. Those cuts will be devastating and what we are doing should not be about that.

I hope that the Minister will have taken that on board in any work he has been doing behind the scenes over the past few months with his fellow Ministers and will give councils such as mine time to bring about changes in their services. There is this idea that, somehow, boroughs all over the place will want to work with Merton council. I do not think it is Merton council’s fault, but not too many want to come in for conversations about that. This year, the council will be combining with another council and one big department to save £2.5 million. We want to do more of that, rather than the terrible things that I have just suggested, but we do not have the time and the ability to do so. Councils simply do not have the capacity not only to run services but to do the sort of consultation and detailed legal work that is needed. Their only other recourse is to go out to private consultants and the cost of that is wrong and prohibitive at a time when every pound matters.

This year, Merton will share a head of legal and civic services with Richmond upon Thames council. I hope that that will be the stepping stone to more joint working over the coming years, but in an effort to make the cuts this year all our councillors will do things that we would rather they did not. Our constituents will ask us to defend them at the same time as our Labour groups and our Conservative groups will say to us, “Don’t have a go at us. It’s you lot who decided this.”

We are going through a very difficult time and I plead with the Minister to give councils as much time as possible to reform their services, to consider how they can do things and to consider being ingenious. The idea that many of them have been doing nothing year in, year out and that they have not been making cuts already is completely not the case.

Let us consider adult social care. I do not know how other hon. Members feel, but I rage when I hear about the £2 billion fund because personal care is the biggest budget, outside the schools budget, that local authorities have to cut. That £2 billion is available because councils will be doing some pretty awful things, such as considering older people’s eligibility for domiciliary care or to go into homes. That is what we are facing. If we have the opportunity, we need to stand back and give councils more time to reform and to do things differently. Otherwise, the choices are particularly painful—not for us, but for some of our most vulnerable constituents.

--- Later in debate ---

[Heidi Alexander]

Indeed. My experience on Lewisham council was that the only occasion on which reserves would be considered for use was when that would be a fiscally responsible thing to do.

[Bill Esterson]

Will my hon. Friend give way?

[Heidi Alexander]

I should like to make progress as I am conscious of the time.

The demonstrations at Lewisham council last week did not take place because that is a Labour council intent upon slashing services or haemorrhaging staff. The demonstrations at Lewisham last week were a direct result of a Tory-Liberal Government determined to cripple councils the length and breadth of the country. I first learned about the riots last Monday when I was on my way home from Westminster. As I sat on the train, I could not help but reflect upon how unfair it was that former colleagues of mine were being blamed for the Government’s decision to inflict cuts that go well beyond anything that is sensible or necessary, and well beyond anything that my party would have done, had we been in power.

As I sat on the train, I also realised that at the exact time that council employees in Lewisham were trying to hold back an angry mob, hon. Members in this Chamber were debating reform of the banking system. For me, the two are not separate issues. Local democracy is rightly accountable for the decisions that it takes, but surely we have to ask: where are the protests outside the plush offices of the bankers whose excessive risk taking plunged us all into this crisis in the first place? For that matter, where are the protests outside the office of the Secretary of State, whose failure to stand up for his Department has forced Lewisham council into its present position?

I am not for one minute suggesting that the violent protests in Lewisham should be replicated anywhere, but surely those responsible for the current financial state of local government should be made aware of the effects that their actions are having on communities throughout the country.

There’s the rub: for me, the Government do not get it. They do not seem to get the fact that by heaping cuts on local authorities, they run the risk of putting thousands upon thousands of people out of work. Ministers do not seem to understand that draconian cuts to local government will simply take work away from private firms—the very firms that they are desperately trying to grow. Nor do Ministers seem to understand that the scale of the cuts could decimate voluntary and community organisations at the precise moment when they want them to do more. Most worryingly for me, there seems to be no acknowledgement that the size and speed of the cuts could force councils to dismantle the services on which the most vulnerable members of our society depend.