Local Government Finance (Rural Authorities)

Chris Williamson Excerpts

Monday 11th February 2013 Commons Chamber

[Chris Williamson (Derby North) (Lab)]

This has been a very interesting and important debate, and I start by congratulating the hon. Member for Tiverton and Honiton (Neil Parish) on leading it.

The Opposition would not support a drift of funding from deprived urban authorities in order to make up the shortfall in rural authorities, but that is not to say that the rural authorities do not have a important case —a case that has been eloquently put by hon. Members this evening.

[Dan Rogerson (North Cornwall) (LD)]

The hon. Gentleman will know that that has been the situation over decades, as we have heard from other Members, but we are not talking about just an urban-rural split. Larger county councils in other parts of the country, such as the south-east, are demonstrably overfunded, whereas councils and authorities such as Cornwall are underfunded. This is not an urban-rural thing; it is about looking at where the need is and ensuring the money gets there.

[Chris Williamson]

The complexity of local government funding is certainly an issue, but when the hon. Gentleman refers to an historic problem, I remind him that in every year of the Labour Government, local government saw growth in its budgets. Only since the election of the Conservative-Liberal coalition have we seen a huge reduction in funding for local government. Of course we must argue for a fair share for rural authorities, but that should not be achieved at the expense of urban authorities.

[Helen Goodman]

Does my hon. Friend agree with the contention that the freeze only really helps authorities in the south-east with high house prices? Is he aware that of the 17 authorities with projected increases in spending power for 2014-15—the year after the £8.5 million one-off grant—no fewer than 14 are in the London commuter belt, while rural areas feature heavily among those facing the biggest reductions?

[Chris Williamson]

My hon. Friend draws attention to a real problem with the council tax freeze grant, as have Government Members this evening. Local authorities of every political persuasion have seen through the Secretary of State’s wheeze. For many local authorities, taking the grant would clearly create significant problems down the road. That is why we are seeing Conservative, Liberal Democrat and Labour authorities refusing to take the grant, for very good reasons.

We have heard contributions this evening from my hon. Friend the Member for Bishop Auckland (Helen Goodman), who we have just heard from again, and the hon. Member for Beverley and Holderness (Mr Stuart), who spoke passionately about the need for a fairer settlement—although, rather paradoxically, he also said he supported the Government’s austerity programme. It seems to me that he cannot have it both ways.

[Mr Graham Stuart]

This is about the allocation and getting a fair share—hence the name of the Rural Fair Share campaign. We were going to have to control public expenditure whoever was in office; this is about recognising the need to look even more carefully to ensure a fair division based on need.

[Chris Williamson]

I hope the hon. Gentleman would agree, however, that it would be completely unfair to impose even deeper cuts on some of the most deprived local authorities in urban areas. The real issue is that the Secretary of State volunteered to accept unprecedented funding cuts—far higher than those for any other Department—in local government. The blame rests fairly and squarely on his shoulders; he has let down local government in rural and urban areas alike.

We also heard from the hon. Member for Mid Dorset and North Poole (Annette Brooke), who made a significant contribution in calling for greater clarity about funding for local government. She made the point that there is no scope in her local authority for more efficiencies. She and others have seen through yet another scam from the Secretary of State: his “50 ways to save” document. Let me tell him that all local authorities have been doing that for years. I do not understand what he is talking about when he issues such a document. It might make a good soundbite in a press release, but he is not living in the real world.

We also heard from the hon. Member for Totnes (Dr Wollaston), who talked about the cost of delivering health and social care needs in rural areas and referred to the cost of rurality. It was interesting that the Secretary of State, sotto voce, did not seem to understand the term “rurality”. Perhaps that is an indication of the sort of problems that local government in rural areas is suffering from.

Finally, the hon. Member for Penrith and The Border (Rory Stewart) talked about the importance of communities, but when the Secretary of State agreed the unprecedented cuts in local government funding, he drove a metaphorical knife into the heart of local communities up and down our country.

[Richard Drax (South Dorset) (Con)]

I regret the tone and the personalisation. As far as Government Members are concerned, this debate is about the share for rural communities from an inherited budget that, as the hon. Gentleman will know, left this country in a terrible state. It is about the share for rural communities; that is what we are trying to fight for.

[Chris Williamson]

I remind the hon. Gentleman that there was a worldwide banking crisis and that it was Margaret Thatcher who deregulated the financial markets. The problems can be traced back to the big bang and the deregulation of those financial markets.

[Duncan Hames (Chippenham) (LD)]

rose—

[Chris Williamson]

I will give way to the hon. Gentleman in a moment.

What I regret is the Secretary of State letting down or betraying local government. Again, it is important to understand that it was this Secretary of State who volunteered for the biggest single reduction in Government funding of every Government Department. Government Members might not like to hear that, but that is the truth of the matter. If the Secretary of State had stood up for local government, local councils would not be in the parlous situation in which they find themselves.

[Duncan Hames]

rose—

[Chris Williamson]

It is clear that the rural authorities are by no means the only authorities to have been dealt an almighty body blow by this Government—far from it. Councils in the north, councils in the south, councils in the east, councils in the west, county councils, district councils, borough councils, metropolitan councils, unitary councils, councils that serve urban areas and councils that serve rural areas: all have suffered at the hands of this Secretary of State. As I have already said, if he had done his job properly, today’s debate would not have been necessary.

[Duncan Hames]

I thank the hon. Gentleman for eventually giving way. Of course, his Government reduced the number of councils in Wiltshire and Cornwall that were underfunded in rural areas by abolishing them. Given that he has not found any alternative source for making the distribution of funds fairer, is the best he can offer to councils in Somerset and Devon the same prescription as his Government dealt those rural councils in Wiltshire and Cornwall?

[Chris Williamson]

Not at all. We are not making that point in any way, shape or form. Indeed, my right hon. Friend the shadow Secretary of State for Communities and Local Government has made it clear that Labour’s policy is to give a fair deal, a new deal, for local government and to allow local government on the ground to determine the shape of local government, rather than it being imposed from the top. The local authorities to which the hon. Gentleman refers wanted the local changes brought about by the Secretary of State at that time.

[Mr Speaker]

Has the hon. Gentleman concluded his remarks?

[Chris Williamson]

In the interests of brevity, I will sit down and allow the—

[Mr Speaker]

The hon. Gentleman does not need to make a speech about it, but we are grateful to him.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

I congratulate my hon. Friend the Member for Tiverton and Honiton (Neil Parish) on securing today’s important debate. It seems ironic that the first time I am at the Dispatch Box at this time of night since the last time I was here at this time of night, we are debating rural areas looking for fair funding. Last time, it was about urban areas, and Newcastle Members and others made the same sort of case for those areas.

I shall have to keep my remarks relatively short, as the hon. Member for Derby North (Chris Williamson) talked for some time, and I want to ensure that my hon. Friend the Member for Tiverton and Honiton gets the chance to sum up. If I do not cover everything Members have brought up this evening, I would be happy for them to come and see me—now or over the next few months—as we continue to argue passionately and with great determination over the issues raised tonight. However, as one of my hon. Friends commented a few moments ago, the tone of the debate changed dramatically when the hon. Member for Derby North decided to avoid the fact that it was the last Government who had pledged £52 billion in local government cuts. Labour Members have seemed not to want to discuss that in any way, while opposing every change and every reduction that we have introduced to deal with the deficit that we inherited from their Government. That cannot give any credibility to what they say about the money that is needed for local authorities.

The hon. Gentleman spoke of standing up for local government. What he should have observed tonight, and over the past few weeks, is the Secretary of State and other Government Members standing up for their local residents, for their communities, and for the hard-working taxpayers for whom we have introduced the council tax freeze option.

[Chris Williamson]

In that spirit—the spirit of Government Members standing up for their communities —will the Minister invite the Secretary of State to stand up for local government throughout the country, and argue with the Treasury the case for giving it a fairer share of the cake? Does he accept that its funding has been cut by 28%, which is a far larger reduction than any imposed by other Departments?

[Brandon Lewis]

I thought that the hon. Gentleman had something to say that was different from what he had already said. Again, he avoided mentioning the £52 billion of cuts that his party had pledged to make. My point is that Government Members, including the Secretary of State, are standing up for the people whom we are elected to stand up for—the hard-working residents who will benefit from the council tax freeze that this Government are providing.

Let me say in the few moments that I have left that the thinking behind this local government financial settlement took into account ways in which councils can make progress in the years ahead, and that we believe it to be fair to both north and south and to both rural and urban communities. As others have pointed out, we have managed—although, I recognise, not to the extent that some would have liked—to reduce the gap between rural and urban. We have made adjustments to relative needs formulas to reflect the greater cost of providing services in rural areas. That is one of only three formula changes in the settlement. We have increased the weight of super-sparse areas in the formula, doubled the sparsity weight for older people’s social care, reinstated the sparsity adjustment for county-level environmental protective and cultural services, and introduced a sparsity adjustment for fire and rescue. As a result, funding per head is falling by less in predominantly rural authorities than in predominantly urban authorities, in all classes.