Local Government Spending (Floods)

Catherine McKinnell Excerpts

Tuesday 20th November 2012 Westminster Hall

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gray, and I congratulate the hon. Member for Thirsk and Malton (Miss McIntosh) on securing what I agree is a very important and timely debate. She made a powerful case on her constituents’ behalf and I look forward to hearing the Minister’s response to the many questions she asked.

I want to speak on behalf of my constituents in Newcastle upon Tyne North, who have unfortunately experienced a dreadful time since the deluge of rain in June this year in particular, and ongoing rainfall has compounded the issues and challenges that many people face. To set that in context, it comes as local authorities are experiencing cuts to their budgets that are deeper and faster than in almost any Whitehall Department. It is right and timely that we have this debate on the implications of the recent flooding for local government spending.

Many Members may have witnessed the devastating floods that hit Newcastle north. The images of the building at Spencer court in Newburn resting only on its stilts were used by many news stations to demonstrate the impact of the downpour not only in Newcastle, but nationally. I want to pay tribute to the area’s residents who have suffered terribly from the damage that ensued from the rainfall, and also to clarify some related points that are separate from issues raised by the hon. Lady. What occurred in Newburn and Spencer court, leading to those shocking images, was caused by a culvert being damaged and the rain taking the land away with it. That, however, does not take away from the fact that, for an awful lot of families, it resulted in immense damage, suffering and hardship. Although the local authority and the emergency services had to step in and try to resolve the issue, the repair work, support and funding will have to come from the responsible parties, who are the landowners and developers. They are deciding among themselves whose insurance will need to come into play to resolve those issues. I want to recognise today not only the immediate impact and costs that Newcastle city council faced in dealing with that matter, but the broader issues that the city has experienced, for which it has received no financial support so far.

To put what happened in context, during just two hours on 28 June, Newcastle experienced 50 mm of rainfall, which was the expected total rainfall for the entire month. It caused widespread, localised flooding across Newcastle, with the city’s drainage system overwhelmed due to the unexpectedly high volumes of water that fell in such a short period. The city’s roads quickly became gridlocked and 200 homes were flooded, causing misery for many of my constituents.

Again, I must pay tribute to the heroic staff, particularly at Newcastle city council, and the emergency services—including the fire and the police services—as well as the Environment Agency, which, I agree has, certainly in my part of the world, become like the fourth emergency service. People worked throughout the evening and the night, and it is testament to their hard work and dedication that the majority of the city was ready for business the following day. However, I highlight again the part of my constituency that was not ready for business—down in Newburn and Spencer court—as well as the ensuing problems: the town below in Newburn was flooded, and it is just getting back on its feet after a traumatic few months for its residents.

Since that day, my constituents and Newcastle city council have been counting the costs. The council estimates that the flooding costs will be over £9.2 million. The majority of that—around £8 million—is due to works that have been or will need to be undertaken, such as repairing highways and pavements. Under the Bellwin scheme, the council is eligible for certain costs above an annual threshold of £853,509. Of the £9.2 million in costs incurred by the council during the flooding, only £328,000 can be reclaimed under the Bellwin scheme, and as that is under the annual threshold, the council has not received any financial support from central Government to deal with the aftermath of the devastating floods. That has been confirmed in writing in a letter to the council from the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker).

The funding for dealing with the aftermath of the flooding will therefore have to come from Newcastle city council’s capital allowance and further borrowing, with that being serviced through the revenue budget thereafter. As a result, the council will have to find additional funds from the revenue to service borrowing to deal with the aftermath. That is a particular concern, given the importance of the city’s focusing all its efforts on creating jobs and boosting growth in a part of the country that has been hit hard by the economic downturn. The situation is compounded further by the unprecedented and, I would say, disproportionate cuts that the council is facing, compared with many other local authority areas in the country.

The council faces cuts of £90 million imposed by the Government from an overall revenue budget of £266 million. That represents a cut of just over one third to the council’s budget, or £164 per person. Compared with funding reductions that many Conservative-run councils are facing—more in the region of £16 per person—people can understand why residents in Newcastle and other similarly affected cities feel that there could be some political motivation for those deep cuts, the scale of which is disastrous. They will impact greatly on the services that the council can provide.

The Government gave warm words of support following the flooding, with the Prime Minister, in response to a question from my hon. Friend the Member for North West Durham (Pat Glass), stating that the Government would,

“lend a very sympathetic ear to the local councils.”—[Official Report, 4 July 2012; Vol. 547, c. 918.]

The Secretary of State for Communities and Local Government assured my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) that the Government would, with regards to an application from Newcastle,

“look at it most sympathetically in terms of the formula.”—[Official Report, 2 July 2012; Vol. 547, c. 582.]

Despite those warm words, Newcastle city council has not received any financial assistance to deal with the aftermath of the flooding on 28 June. Indeed, the council has had to borrow funds to do so, and again, that is happening on top of the already devastating cuts that it faces.

I hope to hear reassurances from the Minister today, particularly when he deals with the many questions asked by the hon. Member for Thirsk and Malton. Both the Prime Minister and the Secretary of State have said that they will look at cases sympathetically, and they have said specifically said that they will look at Newcastle sympathetically. Rather than give more such vague promises, will the Minister provide assurances that he will look again at Newcastle city council’s case, in order to ensure that the burden for the floods does not lie entirely with hard-pressed council tax payers in my constituency?

--- Later in debate ---

[Brandon Lewis]

I was not eulogising the Government, but making the point that we are spending £470 million a year which, considering the economic mess that we inherited from the previous Labour Administration, is something that we should all know about.

Let me turn now to the role of local authorities. As ever, local authorities have been on the front line of the response to the flooding this summer. Of course, once flooding has subsided, recovery begins. Local authorities support such work from their reserves, which are there to help to meet the costs of emergencies, such as flooding. Of course, Bellwin is also in place.

I am sure that local authorities will look sympathetically at requests for hardship relief from business rates for businesses affected by the flooding. They were urged to do that quickly in the immediate aftermath of the event. If they grant such relief, Government will fund 75% of the cost.

[Catherine McKinnell]

The Minister spoke very quickly, so will he go back a sentence and repeat what he said? On what requests will the Government look sympathetically?

[Brandon Lewis]

I said that I was sure that local authorities will look sympathetically at requests for hardship relief from business rates for businesses affected by flooding. They were urged to do that immediately after the event. If they grant such relief, Government will fund 75% of the cost.

Aside from hardship relief, I am sure that local authorities will have taken advantage of the changes introduced by the Local Government Finance Bill to fund discounts for ratepayers as they see fit. Flooding would seem to be one of the circumstances for which the new power was designed.

Let me deal with transport. My ministerial colleagues at the Department for Transport recognise that many parts of the country have seen high levels of rainfall and significant local flooding incidents, which have impacted on residents, businesses and transport infrastructure. Like me, they pay tribute to the excellent multi-agency response and the ongoing work by local highway authorities to help those who have been affected.

However, local authorities have responsibility for the local roads in their areas and are best placed to determine their own priorities for funding, which include putting in place reasonable resilience measures and contingencies to deal with any incidents, such as flooding, that may occur from time to time.

The Department for Transport is providing more than £91.7 million to North Yorkshire for highways maintenance funding over the spending review period. For this financial year, we are providing more than £24 million. The Department allocated North Yorkshire a further £6.6 million in March 2011 for damage to its highways network caused by the severe winter of 2010.

Despite the current economic situation that we inherited, the Government will continue to provide £3 billion to councils for road maintenance over the next four years to 2015. The Department for Transport also provided a further £200 million in March last year as an exceptional payment to help with much-needed road repairs following the severe weather at the end of 2010.

My hon. Friend the Member for Thirsk and Malton commented on the Emergency Planning College. The college is a Cabinet Office-sponsored facility. Given my responsibility for the Fire Service College, I warmly welcome it and look forward to paying a visit in due course. A great deal of work on interoperability is going on across Government at the moment, to which both colleges are contributing. The joint emergency services interoperability programme aims to deliver significant benefits in future emergency responses. My hon. Friend makes a good point. Over the past few weeks, I, too, have been talking about the facilities at the Fire Service College. The more that we can get our emergency services working and training together in such environments, the better it will be for everybody on the ground.

On the planning case in Filey, I hope that my hon. Friend will appreciate that I cannot comment on individual cases. None the less, the Government have ensured, through the national planning policy framework, that new homes and other buildings will not be built in areas of high flood risk.

As for the comments made by the hon. Member for West Lancashire (Rosie Cooper), the climate change risk assessment identifies increased risk of flooding for the years ahead and informs flood defence investment. We cannot prevent all flooding, so the need to plan well locally is important. The hon. Lady’s constituents who may feel abandoned need to make their councillors aware of their feelings and to demand improvements.