Chris Leslie
Main Page: Chris Leslie (The Independent Group for Change - Nottingham East)
Grant Shapps
Well, I heard with interest what the right hon. Member for Southampton, Itchen had to say about some of the funds. The truth is that existing commitments are being honoured and a new fund is going to be set up to pull together the many different streams that currently help people get back to work. It seems to me that again Labour Members see any change that did not emanate from Labour during the 13 years in which it was in Government as a problem and are willing to attack it.
Grant Shapps
I shall give way in a moment after making a little progress.
So the £6.2 billion immediate savings this year are the priority to tackle the inherited £156 billion deficit. It is worth saying it again—£156 billion. [Interruption.] They do not want to hear it, because the figures were in danger of bankrupting this country—of putting us into a Greek-style crash. But to hear the right hon. Member for Southampton, Itchen today from the Dispatch Box, one would not believe that he was speaking for the same party that sat on the Government Benches and took this country to the edge of that fiscal position.
Now with this fiscal challenge we also have an opportunity. Our actions to rebalance the public finances give us a chance to decentralise power, to weaken the command-and-control apparatus of the central state. Devolution is the solution; the centralised state the problem. We need to cut wasteful spending, but let us put local councillors and local people back in the driving seat.
Grant Shapps
I am very grateful to my hon. Friend for mentioning some of the top-down inspection regimes, such as the comprehensive area assessment, a £39 million programme responsible for—get this—wasting 151,000 days of local government officers’ time each year, and for what purpose, what advantage, what great body of knowledge that could somehow be used? The answer is that the previous Government did not know when the money had run out and carried on spending it ad infinitum.
Chris Leslie
Will the right hon. Gentleman scrap the Audit Commission? Will there be no audit or inspection?
Grant Shapps
We certainly will have inspections and a basic template. The question is: how much inspection do we need? I invite any Opposition Member to explain how spending 151,000 days of officer time answering a comprehensive area assessment was of any use to local residents. Opposition Members talk about localism, but they do not get it. They talk about the principles of handing over power, but they do not understand that when—according to 2006 research—officers in town halls spend 80% of their time servicing the needs of Ministers and Whitehall and only 20% of their time looking after local residents, they no longer serve the democratic values of local people. That is not localism; what we are describing today is localism.
In these tough times it will be our goal to protect those in the greatest need—local residents and, especially, struggling families and pensioners. Under Labour, council tax more than doubled. We will work with local councils to freeze council tax for a year and, if we can afford it, for another one. Scotland has done it, with band D council tax now £290 a year less than the comparative figure south of the border. We want that to happen in England, too.
Grant Shapps
The hon. Lady will no doubt welcome the £1 billion fund for regional assistance.
Grant Shapps
Which is new money and was announced last week. No doubt the hon. Lady in her next intervention will welcome that money, which would presumably go to areas such as that the one she describes.
Grant Shapps
I accept that the hon. Gentleman and local authority leaders and councils throughout the country work hard to do those things. However, sometimes just doing something in a closed situation is not enough and we have to invite the whole general public to take part. We need to publish the stuff online, make it fully transparent and let people see what is really going on. As I explained in the context of my Department’s responsibilities, if that had been done, I do not believe that those tens of thousands—and even hundreds of thousands—of pounds would have been wasted on pointless projects. On a smaller scale, there will be examples in town halls throughout the country of money being spent on unsustainable projects, which best value committees sometimes do not reach, but a large army of armchair auditors will. It is called the general public; it is called transparency, and it will work effectively.
Chris Leslie
Will the Department also publish items that cost £500, so that the position between local government and central Government is fair?
Grant Shapps
Central Government obviously have a large budget—[Hon. Members: “Ah!”] They do have a large budget, so the limit will initially be set at £25,000—[Interruption.] Opposition Members are making a great deal of noise, but each of the projects that I mentioned a moment ago would have been captured under such a system. We would have known about the red sofas, the tranquillity centre and all the adverse expenditure. That would have helped. One has to wonder at the Opposition—after 13 years without such transparency and openness, when the coalition offers to open up government, they just want us to go further. That is fantastic, but they had 13 years in which to go much further, but they did not and they wasted taxpayers’ money.
The coalition agreement makes it clear what to expect. The time has come to transfer power away from Westminster and Whitehall into the hands of communities and individuals. We will make rapid progress because we have already announced several shake-ups of power. The move to a more democratic planning system will sweep away arbitrary top-down targets and hated regional spatial strategies, introducing powerful financial incentives to local people instead.
The previous Housing Minister is no longer in the Chamber, but I am a fan of his blog. I note that this week he writes:
“DCLG ministers are changing the planning system.”
He adds:
“Ours was too top-down”.
Hon. Members can read that online—a road to Damascus conversion from Labour, now in opposition. The new coalition intends to prove that Ministers can be localist in government, just as we can in opposition. There will be no switch-around.
John Hemming
I cannot comment on the detail of what has happened in Sheffield. I agree with the argument that deprivation has to be taken into account. There is no question about that. The idea of the pupil premium is that the money follows the individual rather than catchment areas from the national census. One of the difficulties with many of the calculations is that they have been done not on an individual basis but on a categorised basis.
The hon. Member for Sheffield South East makes a good point that if we cut the Government grant and do not look at the aggregate local government spend, that has an effect. There is an issue to be looked at there. People have asked whether we should cut 25% here, 26% there, 23% there and 27% somewhere else, or whether, given that we face such a severe problem, the same figure should be cut everywhere on a formulaic basis. I am quite tempted by the latter argument. I think that that method was used in Sweden, which faced a serious problem. It had the same sort of deficit and it went through the process of getting rid of it.
John Hemming
One has to make judgments on the time scale based on the effect within the markets. We are not talking about paying off the debt over five years. There will still be net borrowing in the fifth year.
John Hemming
That will reduce the deficit because we will spend, and therefore, have to borrow, less money this year. That is not complicated. If we spend less money, we do not have to borrow as much, because the money that we spend has to be borrowed on the gilts market. It would be nice if the reduction were done more cost-effectively at times, but £6 billion is not so great in comparison with the overall deficit. It is appalling for local authorities to pretend that they did not know that cuts were coming down the track, that the country had a major financial problem and that they had to do something. There will be difficulties, but Total Place is part of the solution rather than the problem, and there is no question but that we have to do something.
In the past I have explained how, through various regulations, the people who go round and wash people’s feet are different from those who go round and cut their toenails, because they have to have different qualifications. That is not an efficient way of providing public services. If, through Total Place, the same person can go round and wash people’s feet and cut their toenails, that will be more cost-effective and involve less travel time—[Interruption.] The hon. Member for Nottingham East (Chris Leslie) should make an intervention if he wants to speak.
Chris Leslie
Did the hon. Gentleman mention in his manifesto that he would cut so much money from his local authority area?
John Hemming
Interestingly, we did not ring-fence anything in our manifesto. We were clear that there was a severe financial problem and spending cuts would have to be found. The Labour party revealed so little in its budgets and concealed most of the figures and budget cuts, so it was difficult to put all the figures together, but Members will find that, when I explained the situation in debates during the general election, I made it clear that we faced serious problems. If the Opposition are going to have such a row about what is a minor point compared with the overall magnitude of the difficulty, I do not know what will happen over the next few years. There are some real problems to face, and we need to maintain services.
The point that the hon. Member for Sheffield South East made about adults’ and children’s services was very important. In Birmingham we use the brighter futures programme, and there are ways of working more closely with the people whom we support in communities, and of working with mutual bodies to try to ensure that services are provided. There have been problems with assessment systems in the past. The simple approach of just changing the priority on assessment did not result in any savings, because off the back of that, all the assessments were changed. There are serious problems, and the Opposition should recognise that they are responsible for them. They should try to be part of the solution rather than the problem.
Chris Leslie (Nottingham East) (Lab/Co-op)
Members on the Benches opposite are, understandably, repeating this desperate mantra about “unavoidable cuts”. I suppose they think that if they can cling to that enough and repeat it often, somehow it will become true. These announcements of reductions—these swingeing cutbacks of public services—are not unavoidable; there are alternative strategies. Taking out 25% of public spending in these unprotected departmental expenditure limits within such a short period of time—four years—is to act too quickly and too harshly. There is no consensus among economists—that is certainly the case globally, let alone in this country—that this approach is the only way to protect our triple A rating and is essential in order to avoid a Greek-style arrangement. I suspect that either there is a little naivety on the part of the Liberal Democrats in propping up this ideological zeal to reduce public spending, which has always been present in the right wing of the Conservative party, or the Liberal Democrats—at least some of them—have sold their souls in order take on the trappings of high office. I hope that is not the case, but I am sure it is beginning to look to many of my hon. Friends as though it might be.
In my constituency, in Nottingham, the first tranche of service cutbacks—taking out the £6 billion and having £1 billion of reductions in local government spending—meant £4.5 million taken out of Nottingham’s front-line services. Some £2.7 million has been taken out of the education area-based grant—that money is not just for the one-to-one tuition that we were hoping to have for children in most need, but for the school transport budget, the special educational needs budget and so on—and £1.2 million has been taken out of the working neighbourhoods fund. The title of that fund does not really capture what it does, because the fund helps to combat teenage pregnancy and ensures that welfare rights advice is given to people. It provided the money that went hand in hand with the future jobs fund to help to get young people off benefits and into work. Millions of pounds have been taken out of these services, with £350,000 being removed from road safety spending and £2 million from the transport capital grant.
Chris Leslie
I know that will affect the constituency of the hon. Member for Sherwood (Mr Spencer), as it neighbours mine.
Mr Spencer
Does the hon. Gentleman agree that Nottingham city council might have been assisted if it had not had to dispose of three chief executives before their contracts expired, because they could not get on with the Labour-controlled city council, and pay them settlement fees in excess of six figures?
Chris Leslie
No, I would not agree. The tactic of the hon. Gentleman and of many hon. Members on the Benches opposite is to pick one or two anecdotal examples of problems, creating from those a whole story about how the public sector is rife with inefficiency and difficulties, and has to be culled. I presume he thinks that the only way forward is this fantastic private sector drive, which is always correct in all circumstances. There are examples of poor practice in the public sector, just as there are in the private sector. All I say to him is that taking 25% of public spending out of these vital services within four years will affect his party and the Liberal Democrats at the ballot box, particularly in the local elections next year; it will be interesting to see the reaction from the Liberal Democrats then.
We are all constrained by time in this debate, but I wish to raise a couple of points, especially on the local government finance particulars that have not been addressed so far. Some of my hon. Friends have mentioned the difficulties created by the in-year reductions in the first wave of announcements. Strangely, there will probably be four chops of the axe: the first announcement at the end of May/beginning of June; the Budget; the spending review coming up in the autumn; and another Budget in March. One consequence is that the ability for any sensible local authority to plan ahead carefully, cautiously and sensibly on a medium to long-term framework containing some understanding of what settlements it might achieve, given that the vast bulk of local government money comes from grant, has gone entirely. No sane or sensible local authority will be able to make any decisions about how it proceeds for the medium term until it has heard what is in the spending review. The danger in making some of the reductions within this mid-year period is that the short-termism will create extra harm, because changes will not be thought through or evidence based, and unfortunately they will probably hit those in most need.
Another consequence of this short-termism is that it affects some of the carefully constructed partnerships between public agencies within localities, which we have all been hearing about. We all, of course, want Total Place and we want local authorities to work together, be it at local strategic partnership level or under the local area agreement frameworks. Those partnerships have been shattered into smithereens because each public agency will retrench into its shell, with local authorities having to focus very much on their own situation and being unable to pool discretionary resources with other agencies. I am sure that the same will be the case in respect of police authorities, health bodies and others, and I very much regret that move.
The Government also decided to scrap the local area agreement reward grant. Again, this is a technical area, but the grant was important in process terms because it encouraged some sharing of objectives between central and local government. Not every front-line service is determined by a local authority alone. Of course, as we have heard, all sorts of services depend on central and local government working in tandem. Driving a coach and horses through the local area agreement framework will mean that local authorities will have absolutely no incentive to work in partnership with central Government, because in doing so all they have been given is a slap in the face. That is a great pity, because although this approach may not necessarily be noticed by our constituents, it is a crucial piece of the jigsaw that made a big difference.
The notion that the Government have been so generous in removing the ring-fencing from a series of grants after they took the axe to area-based grant that already exists is worrying. If the first thing that the Government decide to cut is that budget, which already contained a degree of flexibility and involved local authorities having an amount of freedom—local councils were getting used to working without the constraints of the centre—and straight away the front-line thing that goes is the area based grant and that flexible money, what will be the reaction of any local authority when the next tranche of money is magically un-ring-fenced? Naturally, those will be the next sums of money to go through the exit door, be they for the de-trunking of roads or for housing market renewal—the Government say they are removing some of the ring-fencing from that. Those will be the items of expenditure that will probably be cut next, because that is the signal that the Government are sending.
Gordon Birtwistle (Burnley) (LD)
The housing market renewal grant was obviously spent on renewing areas. Does the hon. Gentleman think that spending 10% of the total money—more than £300 million—on mini-quangos that simply passported the money through was sensible? Last year, more than £33 million was spent on these quangos, which basically just passported the money through. That has now been running for four years. More than £130 million, which could have been paid direct to local authorities to deliver the programme, was sent through totally unnecessary quangos set up by the Labour Government.
Chris Leslie
The hon. Gentleman can make these points, but they are dancing on the head of a pin. I think it is important that this money goes to the front line and gets spent, but it certainly will not help to cut these sums of money by a quarter—probably more than that—over four years. The hon. Gentleman seems to have these issues completely out of proportion. It is also interesting that in a written answer to me, the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), had to correct the announcement that the Government had made to the House about the un-ring-fencing of so much money. They discovered that a mistake had been made when they said that £300 million of private sector renewal moneys and the housing and planning delivery grant had been un-ring-fenced. It turned out that that money was already flexible, so their totals were changed entirely.
I want to talk about one or two other points that have not been mentioned much. Capital spending on infrastructure and on the improvement of the basic facilities in many of our constituencies is essential. Not only is capital grant being reduced significantly, but a little-spotted change was announced in the Budget in respect of prudential borrowing and the freedom that the previous Administration gave to local authorities so that they did not have to jump through all sorts of Treasury bureaucracy to be able to access capital loans from the Public Works Loans Board. An item in the small print in the Red Book now states that local authorities will have those requests from the PWLB scrutinised far more closely than before. In other words, it is a return to the days of centralism, if they get that money at all. Local authorities will have less capital grant as well as less ability to access PWLB money.
Does that mean that local authorities will have to go for bond finance, which is more expensive? I would certainly like to hear more from the Government about that; there was not an announcement in the Budget about bond finance. I would also like to hear where we stand in terms of accelerated development zones, tax increment financing and other measures that would be useful in encouraging innovation in the way in which local authorities access capital markets.
My final point concerns the choices that local authorities face and where they go with these difficult decisions. Many Government Members might have local authority members who are happy to take on the full burden of the reductions in the services that affect their constituents who are in most need. Many Labour authorities—and indeed, those run by the Liberal Democrats as they used to be—might want to try to temper that and to consider raising revenue from other sources. Traditionally, council tax has been the only option, although there is a quasi-capping arrangement going on with the supposed one-year council tax freeze deal. Most local authorities will probably be fairly daft not to accept the money that is on the table, although it is entirely unsustainable. There is no way that the Government will be able to extend that for long. After we have gone past this first year, we should be aware that the gearing ratio means that local council tax increases could easily be of the 10% to 15% variety. Does that mean that the Secretary of State will bring capping back in? Again, so much for his localism.
I suspect that the real burden will end up hidden away in the fees and charges that all our constituents have to pay, with a return to the easyJet council model—it will be hidden not just in planning charges, parking charges, swimming and library charges and so on but in those social care charges that hit the poorest most of all. Unfortunately, this is an ideological set of changes— although I hope that the Liberal Democrats will think again—that are certainly not in the interests of any of our constituents.
Mr Spencer
A number of schemes have been tied up in bureaucratic nonsense, and local authorities have had to jump through a number of hoops to deliver centrally issued targets that create an enormous amount of bureaucracy for local authorities. I shall say more about that shortly.
It is little wonder that the country’s national finances were brought to the brink of an abyss, given the last Government’s lack of vision and basic financial understanding. We only just avoided the intervention of the IMF in our finances; we were very close to that, as has been widely recognised.
Chris Leslie
What evidence has the hon. Gentleman that we were on the brink of having the IMF called in?
Mr Spencer
It was widely recognised—globally—that this country’s finances were in dire straits. Global economic markets were betting against our economy. We were saved only by the markets’ recognition that an election was coming, and that hopefully a Conservative Government would take over. We are in the fortunate position that the coalition has tackled those issues and saved this country from the enormous abyss it was facing.
The only way to deal with local government is to give power back to local government. Local people are much better placed to make local decisions. I welcome the decentralisation of local government and its management, and I sincerely hope that when we pass that power down the structure, better decisions will be made. I am very much encouraged by the thought that that will happen.
I am quite frustrated by the number of Opposition Members who have said that the leafy shire counties are all right thank you very much. Hon. Members should come and look at Nottinghamshire and at Sherwood. We have some challenges and some areas of real deprivation, such as Ollerton, Rainworth, Blidworth and Bilsthorpe right in the middle of Nottinghamshire county.