Local Government Finance

Chris Leslie Excerpts

Wednesday 9th February 2011 Commons Chamber

[Hazel Blears (Salford and Eccles) (Lab)]

I shall keep my remarks brief, because I know that many Members want the debate to wind up. I shall have the opportunity tomorrow afternoon to meet the Minister for Housing and Local Government together with my hon. Friends the Members for Manchester Central (Tony Lloyd) and for Blackley and Broughton (Graham Stringer). I can tell the Minister that I am looking forward enormously to looking him in the eye as I make my points on behalf of my community, which I feel incredibly strongly about.

Today, I have a terrible feeling of déjà-vu. When I came into the House 13 years ago, it was at the end of almost 20 years of Conservative Government. Before that, I was a local councillor in my community for eight years. I had spent every one of those eight years as a councillor under a Tory Government cutting budgets year on year. When I came here, our public services were on their knees. Two of my inner-city wards had 50% male unemployment, and we had 70% youth unemployment. My local council had been absolutely decimated. That was the reality of being in local government under a Tory Government, and I am sorry to say that it feels as though history might be about to repeat itself. All the progress that we have made over the past 10 to 15 years is in the process of being unravelled; we are going to go backwards instead of forwards.

Recently, I had a meeting with my chief constable, Peter Fahy, to talk about the police cuts, which we discussed here earlier today. I have a huge amount of time for him; he is an extremely good officer. He told me that what worried him most was that we would go backwards and undo all the progress that had been made. He was particularly worried that the advances that we have made for young people would be undone, because young people are the foundations for the future.

I put it to the Secretary of State that the cuts that he is imposing are unfair. They are unfairly targeted at the poorest communities, and they will undermine the foundations that we have built for the future. The education results in my city are now immeasurably improved, crime has gone down dramatically, and housing and regeneration have gone forward apace. We have Media City at Salford Quays, and we have the opportunity to build a fantastic future. This year, however, we are facing £47 million of cuts in Salford. Next year, it will be £48 million, and the year after, it will be £55 million. Those are not political choices. I do not know how the hon. Member for Harrow East (Bob Blackman) can stand up in the Chamber and make the outrageous claim that councillors who are doing their best to protect their communities are making deliberate, unnecessary political choices to cut services. That is an insult not only to Labour councillors but to Conservative and Liberal Democrat councillors. I have been a councillor, and I know how hard it is to make the kind of choices that are having to be made now.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Does my right hon. Friend agree that some of these grant choices are not simply about fairness? For example, some of the settlements for the fire and rescue authorities could be very dangerous. In Nottinghamshire, the number of fire tender appliances is apparently going to be reduced from 36 to 30. These funding decisions are creating really serious risks.

[Hazel Blears]

My hon. Friend is absolutely right; we share the same concerns. The Greater Manchester fire and rescue authority has had to make even further cuts because the figures changed halfway through its budget process.

I want to make just a few observations about the position that Salford is in. The Chancellor of the Exchequer said, “We will not balance the books on the backs of the poor.” However, Salford is one of the poorest authorities. We are in a consultation process with our community, and I spoke to my leader this afternoon. We are looking at the possibility of having to close libraries and one of our sports centres, as well as taking £1 million out of our youth service and £500,000 out of adult social care. Unlike many local authorities, ours has said that it still wants to provide services to elderly people who have moderate, as well as critical, needs. That has always been a priority for Salford, but we are still going to have to take £500,000 out of that service. We will also have to make a 42% cut in the Connexions service. I want my youngsters to get the skills and to have the ambition to get those jobs in Media City, but how can they aspire to that kind of future if they do not have a proper careers guidance service?

We are having to cut the citizens advice bureaux by 15%—it is the minimum we can do, but we know that people will be out of work, as we are looking at losing 450 jobs in the city. People will have debts and will need advice, so what do we have to do? We have to cut the CAB and the 60-odd independent financial advisers that we funded through the financial inclusion fund, which is about to be slashed. The amount of advice left available will be absolutely minimal. Our voluntary organisations will have to be cut perhaps by 10% to 15%. Again, Salford council is really trying to make sure that it protects those voluntary organisations, but they cannot be immune from the cuts that the rest of the service has to take.

I mentioned area-based grants. I feel strongly about them because area-based grants were specifically directed at poor and deprived areas that had extra needs. The slashing of area-based grants has disproportionately affected those living in the poorest parts of our community. In Salford, it was 11% of our total budget, and much of that money was used to tackle crime and antisocial behaviour, to provide youth services and diversion schemes and to keep young people off the streets and make the community safer. All that is about to disappear.

I genuinely feel that these cuts are unfair, despite the Secretary of State’s smoke and mirrors about spending power, his new definitions and all his obfuscation of the real situation. The cuts in spending power in his area are of less than 1% next year, yet we are looking at 15% cuts in Salford. For the area of the Leader of the House, the cuts are less than 1%; for the Home Secretary’s area, less than 1%; for the Culture Secretary’s, the Transport Secretary’s and the Education Secretary’s areas, less than 1%. These are some of the most affluent parts of the country. I believe that if cuts have to be made, which they do, they must be fair—but they are simply not fair.

I say to the Secretary of State that I have a huge amount of respect for the people of this country: they are not stupid; they understand that hard decisions have to be made, but they also have a well-developed sense of justice and fairness. They will see right through what the Secretary of State is doing. Transparency will come for the Tory party’s actions; people will see right through them.

I commend the campaign launched in the Manchester Evening News. It is a massive campaign against the cuts, urging local people to sign a petition. The Manchester Evening News is not a partisan paper; it represents people right across the conurbation. They, too, can see the unfairness. Nine of our 10 boroughs in Greater Manchester have cuts higher than the national average. The only borough that does not is in the constituency of the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell); that has a below-average amount of cuts. People across Greater Manchester—people in Rochdale, in Oldham and in places right across the area—know that these cuts are deeply unfair. I have no doubt that action will be taken at the ballot box in May.

My final point is about what else could be done. We heard a lot from the Secretary of State about community budgets. As he well knows, I started off my time in the Department with Total Place, which meant bringing together and pooling budgets, co-location, integrated services, systems engineering, and service redesign—all those things that Government Members have talked about. However, for major service redesign, time for planning is necessary—it cannot be done at the drop of a hat, because different skills and competences are involved and people might have to be made redundant. We have heard about the lack of capitalisation for that sort of project; it cannot be done all at once. I echo the points made by my hon. Friend the Member for Sheffield South East (Mr Betts), the Chairman of the Select Committee. Why are these cuts front loaded, which makes it so much more difficult to do the systems redesign that could result in efficiencies without the need for front-line cuts?

The Secretary of State will tell me otherwise, but I genuinely believe that the reason for having the cuts early on is that more freedom to manoeuvre—and to be more generous—will be possible in the two years leading up to the next general election. The Government will hope to reap the rewards from that. I hope that it is not the Secretary of State’s intention to make a partisan political budget in this way. I would like some reassurance that he is trying to be fair rather than to seek political advantage. When we reach the two years before the election and we will have had these massively front-loaded cuts in the first two years, I will be amazed if we do not see the Secretary of State seeking some room for manoeuvre for electoral advantage.

--- Later in debate ---

[Tessa Munt (Wells) (LD)]

I do not wish to rehearse arguments that have been presented by Members on both sides of the House. Instead, I shall focus on the case of Somerset county council.

Before any funding announcements had been made, Somerset county council’s leader announced to local people that he wished to make cuts amounting to £43 million. Then, in early January, he announced that he wished to make a further tranche of cuts amounting to £20 million. He said that he would close some libraries, cut bus subsidies, cut the community safety budget by 100%—which would mean the loss of our wonderful police community support officers—cut funds for the Duke of Edinburgh award and the youth clubs by nearly 100%, and cut arts funding and the voluntary sector by 100%. He also said that he would sell the county farms, which seemed ludicrous to me given that they provide a return of some 6% or 7%—more than could be obtained from any bank.

The leader of Somerset county council seems obsessed with the idea of clearing debt. He does not seem to understand that for most businesses it is quite all right to have a mortgage or a loan. They know what the repayments will be, and they schedule them. There is nothing extraordinary about that. I do not think that I know a farmer or small business man who has saved up all his money before buying stock. Such people go to the bank and take out a loan. They know how long it will take them to repay the loan, and it is scheduled. They increase their assets, and tuck the money back into the business. That is what has happened over many years in Somerset under the Liberal Democrats.

The leader of Somerset county council has said that he wishes to make his cuts over three years rather than four, which strikes many people as a frantic attempt to clear debt. It is a bit like people paying off their mortgage or their car or fridge loan and realising that actually they do not have any money and they cannot buy food because they are so obsessed with clearing their debt.

[Chris Leslie]

The hon. Lady is making an important point about how politicians who are obsessed with debt reduction at the cost of everything else may well find themselves in jeopardy. Does that not remind her of the Chancellor of the Exchequer’s attitude, whom I think she is supporting?

[Tessa Munt]

I disagree, because the situation here is that the county council has £29 million in reserves, excluding the money attached to schools, yet we have a man who wishes to put aside £15 million for redundancies, which is going to decimate the council staff, and to make cuts over three years instead of four. If he was to reschedule his debt over four years, it would be a lot less difficult for people in Somerset. Happily, as a result of campaigning by local people, three libraries have been saved: Shepton Mallet, Glastonbury and Cheddar. However, the library in Highbridge, an area that probably needs a library more than any other because there are so few facilities in that town, is still under threat.

I approached one of the Secretary of State’s Ministers because I wanted to understand. There is so much confusion among local people about what is actually involved, because there is one grant and another grant, and little bits of money get thrown back and forth in conversation, and nobody really understands what is happening. I asked the Minister in question to explain to me in simple terms the situation facing Somerset. In simple terms, this year—the year ending on 31 March—Somerset has £368 million to spend, and next year, starting on 1 April, it has £360 million. That is a difference of only £8 million in spending money, which amounts to 2%. Somerset has had a fantastic deal therefore, so I do not understand the obsession that this gentleman has. Moreover, the Government have been generous in granting £42 million in capital grants. That means we can fix the roads, which are in a shocking state, and do something about school buildings. As far as I can see, the county is £20 million better off than it ever has been, and, as I understand it, the capital grant is cash, and that £42 million is about £41 million more than anyone ever expected to have.

As far as I can see therefore, Somerset has an increase in funding from central Government, and that funding is relatively generous in the current economic circumstances. I therefore do not understand why the county council leader is going to announce a series of cuts next Wednesday. If those cuts proceed and he makes those announcements on Wednesday, I will ask the Secretary of State to give me an appointment so I can come along with the leader of Somerset county council to ask that gentleman to explain himself and his actions.