Charlie Elphicke
Main Page: Charlie Elphicke (Independent - Dover)(13 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Pickles
In a moment.
The hon. Member for Dudley North has to understand that these are local decisions. We have ensured that there are sufficient funds to protect the vulnerable, but ultimately local councils have to make local decisions.
Charlie Elphicke (Dover) (Con)
Does the Secretary of State agree that we are hearing a confused argument from the Opposition, but that it seems to involve a spending commitment of about £7 billion? That money would surely have to be made up through about 2p on income tax, would it not?
Mr Pickles
My hon. Friend is of course perfectly right. The Opposition seem to think that it is magic money, but it would actually come out of people’s pockets through business rates or income tax. The reason why we are in this position is that the guilty people on the Labour Benches allowed things to get out of hand.
Caroline Flint (Don Valley) (Lab)
We have heard it all this afternoon. We have heard every possible excuse and cop-out, but we have not heard a single word of apology to the thousands of councillors up and down the country who give up their evenings and weekends, and much else besides, to make their community a better place to live and who are now being forced to implement the Secretary of State’s cuts. We have heard no apology for the fact that this Government have chosen to impose huge front-loaded cuts on local councils the length and breadth of the country. Those cuts will be deeper and faster than those made by almost any other Whitehall Department, and they will fall hardest on the poorest places. They will cost jobs and threaten vital front-line services.
Today the Secretary of State has tried to pull a fast one, but he has not convinced our own Labour councillors, or even many Tory or Liberal Democrat councillors. In fact, I do not think that he has convinced anyone at all. Once again, he has come up with a whole host of reasons why this finance settlement—which, by common agreement, is the worst funding settlement for local government in living memory—is not as bad as it sounds, but he is not fooling anyone.
Over the past few months the Secretary of State and his team have given us reasons why local authorities should not have to tackle difficult decisions about front-line services in their communities. They have told us that there are other ways in which local authorities can make savings. We have heard that councils are sitting on piggy banks with £10 billion-worth of reserves, yet 70% of that money is already reserved for specific projects, so the figure is nowhere near as high as £10 billion.
More to the point, the cuts to local councils go so deep and fall so heavily that three quarters of single-tier and county councils have less in their reserves than the cuts to this year’s funding. Even if they took up the Secretary of State’s suggestion and spent all their reserves trying to mitigate the damage the Government’s cuts have caused, it would still not be enough. And when next year came, councils would face an even worse funding crisis—but this time with no reserves to call on. That, Madam Deputy Speaker, is
“the economics of the madhouse”.
Those are not my words; they come from a letter from the Conservative leader of Derbyshire county council, Andrew Lewer, who chastised the Secretary of State for peddling “misleading” myths about council reserves. We all know that the right hon. Gentleman likes to talk about bins, but when even his own colleagues tell him that he is talking rubbish, perhaps he should sit up and listen. If he will not listen to them, he should at least take note of his Front-Bench colleagues. However loyally the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell) nods his head in agreement this afternoon, we know what he really thinks from a private letter he sent to Liberal Democrat councillors. He freely admits that in some cases the figures quoted by the Department for Communities and Local Government were rejected as inaccurate. As I mentioned earlier, another quote from the letter reveals the Under-Secretary’s disappointment that so little has been put into the pot, despite the representations of his Liberal Democrat colleagues.
Another area Ministers have looked at is how to plug the gap by dealing with executive pay. Councils were told that if they could not use their reserves, they could cut executive pay. If they did that, they were told, it would be enough to protect jobs and services. I have made it clear time and time again that local councils have a duty to find the best deal for council tax payers—and that includes ensuring that council executives are not paid over the odds and cutting down the size of management teams at the top of councils. In fact, we have gone further than the Secretary of State’s proposals on pay and transparency in the Localism Bill, and I urge him again to include consultants and contractors hired by local authorities when pay details are published.
The suggestion, however, that simply trimming executive salaries by a few thousand pounds here and there is enough to plug a funding gap of £6.5 billion is just fanciful. If every chief executive of every local authority took an immediate 50% pay cut, it would yield less than 0.5% of the savings that need to be found. Even if the entire senior management team of every council in England reduced salaries by 25% overnight, 97% of the cuts would still need to be made.
Charlie Elphicke
Does the right hon. Lady agree that it is not simply a question of excessive pay, but of excessive pay-offs? Nottingham council was mentioned, and a brief piece of research shows that Sallyanne Johnson received a £250,000 pay-off, Michael Frater £230,000, Adrienne Roberts £500,000, and Tim Render £200,000—all in recent times. Will she condemn the administration of Nottingham council for wasting that money?
Caroline Flint
We can all trade examples, so let me provide the hon. Gentleman with one from Hammersmith and Fulham council—one of the Secretary of State’s favourites. Is it acceptable to hire for £1,000 a day a consultant who has already been retired, on a £50,000-a-year pension, on grounds of ill health from another council?
Value for money and accountability for senior pay are important, which is why we supported those elements in the Localism Bill—but we are going further than the Government suggested, and we hope to gain support for that. However, the reality is that for all the grandstanding on this issue, it does not make a dent in the amount that councils have to find to deal with the front-loaded cuts that the Government have chosen to impose on them.
Mr Betts
That is not the intervention that I was expecting. I thought that as those on the Front Bench could not help me, the Back Benchers would.
Why are the cuts front-end loaded? Why do nearly half the cuts come in the first year? I was in Croydon council on a Select Committee visit on Tuesday. Croydon council is a flagship Tory authority. It has participated in Total Place, it has community budgeting, it is part of the big society project and it is enthusiastic about it. The leader of the council sat across the table and said to me, “The thing that is really affecting us and may stop us delivering on projects like community budgeting and the big society is the front-end loading of the cuts, which is making it impossible for us to deal with them in a planned and organised way.”
That is a Conservative authority, and the Local Government Association is saying exactly the same. The front-end loading is forcing the cuts up front, which makes it harder to reorganise and to provide services in a different way. It means more money being spent on compulsory redundancies. It is a major problem, and nobody will explain why the cuts must be front-end loaded. Why?
Charlie Elphicke
Do not many local authorities have substantial reserves? The reason for having reserves is to provide a cushion. Manchester, I believe, is cutting 2,000 staff, yet it is sitting on £100 million of reserves. How can that be justified?
Charlie Elphicke
Does my hon. Friend agree that, extraordinarily, all that monitoring and inspection never seemed to include the over-inflated salaries of chief executives or the ridiculous pay-offs that occurred?
Bob Blackman
I thank my hon. Friend for that intervention, which refers to another thing that took place under the Labour Government. In all those organisations, pay is determined from the top, so as chief executive pay has rocketed, so has senior pay, while the large numbers of people who work for local authorities and do a brilliant job are paid relatively small amounts of money. There is no doubt, however, that the pay of middle management and senior management exploded, and I applaud the Secretary of State’s decision to publish the figures so that the public can see what type of jobs are involved.
We also saw an explosion in the creation of non-jobs, each of which required administrative support, departments and offices, all of which are costs to the taxpayer, specifically the council tax payer. We had a multitude of different grant regimes and ring-fencing so that if local authorities wanted to take decisions, they could not. I therefore welcome the merger of the different grant regimes and the removal of ring-fencing, which allows for local decision making at the right sort of level.
What Labour did was not all bad. The decision to tell local authorities what level of funding they were getting for three years was a good thing because it allowed them to plan ahead. I hope that in future times the settlement from the Front Bench will be offered not just for three years but for four or five years so that there is certainty for local government in planning ahead.
Charlie Elphicke (Dover) (Con)
I shall try to keep my remarks brief.
The Secretary of State has set out our position in relation to debt and the public finances. We all know that we have a structural deficit of £109 billion, and we all know how much interest per day is being paid—£120 million. The hon. Member for Liverpool, Walton (Steve Rotheram) made an impassioned plea on behalf of his city and said that we had had the discussion about the deficit and we should now move on. But that is the problem: we have had the discussion about the deficit and now we are seeing the consequence of years of overspending. We cannot get away from it. I wish we could. I did not stand for election and get sent to this House to be part of the difficult decisions that we have made. All of us as politicians love to hand out lollipops, kiss babies, cut the ribbon at the fête and do the nice things, but the sad reality is that we also have to take the difficult decisions when the nation is in the most difficult position it has been in for years.
Mr Speaker, you will recall that some years ago you sat on Lambeth council when it was under Labour control. At that time, you were a powerful advocate for the Conservative party. After your period in office, I was elected when it was a hung council. You were not able to influence events dramatically in Lambeth as you were in a minority under a majority Labour administration. In a hung situation, things were much more discursive—
Mr Speaker
Order. May I say very gently to the hon. Gentleman that although I am sure his advertisement of my curriculum vitae is well intentioned, it is on the whole undesirable for right hon. or hon. Members to invoke the past positions or experience of the Chair in support of their own arguments? I feel sure that he is dextrous enough to advance his own argument without any assistance from me.
Charlie Elphicke
I meant no discourtesy, Mr Speaker.
Moving quickly to my own history, when I was elected in 1994 we had a hung council. We had a mess to sort out. All three parties worked positively together to do that and, frankly, to look at how to un-bankrupt a council that by then had £1 billion of debt. Difficult decisions were made. The emphasis was very much on ensuring better front-line services. My experience was that although we made difficult rebalancing decisions, we were able not only to protect front-line services but to improve them quite dramatically. People on the doorstep were saying that they were now getting front-line services, as opposed to excessive bureaucracy and—I regret to say in the case of Lambeth in those times—in some cases corruption, so positive changes can be made when difficult decisions are taken and things are reworked.
One thing that I particularly welcome is the council tax position. Council tax has been increased in the last decade or so—I believe that it has doubled—to the current level of £1,439. That is an awful lot of money and a massive increase. We know that, because of the deficit, it is not possible to increase local government spending on the grant settlement side of things. We also know that people have been flayed alive for over a decade, given the amount of council tax that they have been asked to pay. I therefore particularly welcome the Government’s decision to work positively with local authorities to freeze council tax. That is important to constituents such as mine who live in deprived circumstances. Many of them are elderly, and many are poor. Stopping council tax rises benefits them massively, particularly those on fixed incomes. Therefore, on the one hand, we have a set of tough decisions aimed at ensuring that we make those efficiencies, and on the other, we have managed to stop council tax rising, which is important.
I totally agree with the Secretary of State when he says that we need smarter procurement. We are doing that in Kent, with the Kent Buying Consortium. He has said that we need better asset management, too. Many people are more than aware of the position in Newham, where there is a new, flashy building that has cost an awful lot of money. We have to be much more cute about using asset management. We have the streamlining and merging of operations, and in Dover and Shepway we increasingly have shared services, so that there will be a shared chief executive and shared back office. That agenda has been embraced in Kent, which is important. It is also important to consider how best to deliver services. Suffolk county council has at times been a bit over the top with its chief officers, but it has led the way on how services can be run, with care homes operating as social enterprises. In my constituency, I am promoting the case for a care home in Deal to be transferred to a community interest company when the local authority feels unable to continue running it.
That is the right way forward. I do not think that this is a debate in which we should necessarily be partisan or throw rocks at each other, because we know the financial position. I could quote the figures showing that Labour was going to cut the budget by £5 billion—that was in Labour’s pre-Budget report—and all the rest of it, but would that help matters? No, because we know the position of the nation’s finances.
Andrew Bridgen
Does my hon. Friend agree that the fact that my local council in North West Leicestershire is facing budget cuts of 10% somewhat undermines the complaints made by the previous speaker, the hon. Member for Liverpool, Walton (Steve Rotheram), about Liverpool’s budget being cut by 9%? Does that not prove that we are indeed all in this together? We all know who put us in it, and we should not let them forget it for one moment.
Charlie Elphicke
My hon. Friend makes a fair point. Just as when all parties in Lambeth worked together positively in the local authority’s interest, it would be best if we all worked together in the national interest to ensure that all councillors, from all parties, did not try to score political points, which we have seen far too much of lately, but instead worked positively, thinking not about advancement, aggrandisement or the headlines that they might be able to get, but about their constituents. At the end of the day, we were all sent here by our constituents—whether in Liverpool, which is seeking a bit of attention, or anywhere else, it does not matter. All local authority leaders have a responsibility to give their constituents the best possible services and assistance in these extraordinarily difficult conditions.
Tony Lloyd
I invite the Secretary of State to come to my constituency any day of his choosing. We will walk around and talk to local people, and we will ask them about the record of local government under a Labour Government and under previous Conservative Governments. As my right hon. Friend the Member for Salford and Eccles said, when the Labour Government came into power in 1997, Manchester had seen services consistently destroyed. They were fragile and vulnerable. Under a Labour Government there was an improvement in standards in education, health—a much more difficult task—housing and crime and disorder. All those improvements strengthened our communities and put the cement back into our society.
That Secretary of State, who chunters away to his friends, is putting all that at risk and he is doing so deliberately. There was choice. There was choice in the Budget process that he lost with his friends in Cabinet. There was choice when he decided to put money into local authorities such as Somerset, and not to put money into local authorities such as Manchester. That is a particularly cruel cycle of choice and a cruel deception.
The Prime Minister stood at the Dispatch Box earlier today and told the House that he was guaranteeing that Sure Start centres would continue to operate. Let us talk about the reality in a city such as Manchester, which is having to cut children’s services by some 25%. It has had to say that it will give up control of those Sure Start centres, and it hopes that the running of them will be taken over by the voluntary sector or possibly schools. There is no guarantee for the young people in Manchester that the Sure Start centres, which are praised by everyone on the Government Benches, will continue to operate.
My hon. Friend the Member for Hammersmith says the political choice of the Tory council is to cut the Sure Start centres. In Manchester, a Labour council has to put those Sure Start centres at risk because of the actions of the Secretary of State and his friends.
Charlie Elphicke
The hon. Gentleman talks of political choices. Yes, we can talk about statues, Twitter tsars, creative directors and the junket in the south of France, but the key political choice in Manchester is to axe 2,000 jobs while there is £100 million in reserves. How can the hon. Gentleman justify that?
Tony Lloyd
I think the hon. Gentleman is either a little hard of hearing or not too fast at understanding. My right hon. Friend the Member for Wythenshawe and Sale East made the point earlier. Those balances that the Secretary of State and his Ministers have traded and which they said are there as some luxury cushion are, in the case of Manchester, allocated money.
Tony Lloyd
The £64 million that will now be allocated will be for the redundancies that the Government are forcing the council to make. That is the answer to the hon. Member for Dover (Charlie Elphicke). It is a disgrace that Manchester must spend such a huge amount of money making good local government workers redundant. That is the responsibility of the Secretary of State. As a result, the things that the Housing Minister described as being merely earmarked will now not go ahead, so Manchester will lose provision and facilities because of the Government’s decision.
Charlie Elphicke
The hon. Gentleman speaks of the £64 million earmarked for redundancies. What we did in Lambeth, what happens in most authorities, and what the Government are doing, is to examine the possibility of natural wastage and introduce a slower programme of voluntary redundancies, which would not mean as great a shock as the hon. Gentleman is talking about.
Tony Lloyd
Let me try to bring the hon. Gentleman forward a little in his thinking. Manchester would love to have done that. Manchester has not made compulsory redundancies—possibly it is true to say—in my lifetime. Manchester is now having to do that because the pace of the cuts that his Secretary of State is making is so rapid that it has no choice. For an authority such as Manchester, 25% of the budget cannot be taken out of the pot without that resulting in compulsory redundancies.