Clive Betts
Main Page: Clive Betts (Labour - Sheffield South East)(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Pickles
The hon. Lady and her councils were given quite a lot of time. The former Chancellor, the right hon. Member for Edinburgh South West, made it clear that changes were going to be made, and a number of the most vulnerable areas were hit by the fact that it was made clear that the working neighbourhoods fund was going to end in March this year. It seems to me that a number of councils did not make any provision for that and blithely assumed that the money would continue, despite the fact that the Labour Chancellor made it perfectly clear that it was ending. Ladies and gentlemen on the Labour Benches who cheered his Budget announcement did not raise any objection at the time.
Mr Pickles
I will give way in a few moments, but I shall make a little progress, if the Chairman of the Communities and Local Government Committee will forgive me.
The changes make the system fairer and more progressive than it has ever been. The second thing that we did is try to marry the need to tackle the deficit with the need to help councils to adapt, as I told my hon. Friend the Member for Cities of London and Westminster (Mr Field). In December, I said that no council would face more than an 8.9% reduction in spending power and that we would provide a grant to cushion councils that would otherwise have had a sharper fall. Today, we are going further by increasing the transition grant to councils from £85 million to £96 million next year, which means that the average reduction in spending power is just 4.4% and that no council will see a reduction of more than 8.8%.
Let us look at one of the problems that we faced. Concessionary bus travel is a classic example of how the previous Government did things—they made a grand promise without any clue about how it would be funded. Administration of concessionary bus travel under Labour was a shambles. I do not think that councils should have to pay for the misjudgment of the Labour Government, so I am topping up the formula grant by a further £10 million next year to compensate shire districts.
Thirdly, we are committed to protecting local taxpayers. Council tax bills more than doubled under Labour, while front-line services such as bin collections halved. It is only right that we give hard-working families a helping hand.
Mr Pickles
Of course the settlement is very disappointing, but the Government would not do what we are doing had we not found the nation’s finances in chaos and with a record budget deficit. The only reason that we are doing this is that the right hon. Lady failed to control her party.
Mr Pickles
I would give way to my right hon. Friend, but I feel like I have been persecuting the Chairman of the Communities and Local Government Committee.
Mr Betts
The Secretary of State said that this is a matter for local decision, and that there is no need for any council to make cuts to front-line services. Can he name one single council in the country that has so far managed to reach a budget decision without any cuts to front-line services?
Mr Pickles
Yes, I can—Reading and Ribble Valley have done so. We have a list, but the hon. Gentleman is ascribing words to me that I did not say. I said that before authorities touch front-line services, they should look at sharing back offices, chief executives and top offices, move back services and improve procurement. That is what I said. There is a very big difference—right across the country—between councils that have attempted those things and those that have decided to cut deep into public services.
Caroline Flint
My hon. Friend always enlightens us as to the true nature of what is happening in Hammersmith and Fulham. Only in the last week we have heard about a building that houses some 30 charities, from which many of the charities are being evicted. I heard only the other day that Hammersmith and Fulham council is so in touch with the big society that refugees from Afghanistan who were seeking support were directed to an Afghan society that happened to be an Afghan hound society. That shows how in touch those people are with the concerns of their residents, and the extent of their knowledge of the charitable and voluntary sector.
Mr Betts
In the last Parliament the Communities and Local Government Committee conducted a report on Supporting People. It accepted the removal of the ring fence, but said that spending on Supporting People should be monitored. Perhaps as a result of that, the day after the Secretary of State appeared before the Select Committee in December, Westminster city council announced a £1 million cut in its Supporting People services.
Caroline Flint
I always bow to the experience and knowledge of my hon. Friend. This will all come to light in the weeks and months ahead as the budgets are set, and I think we will see that no Members on the Government Benches will stand up for Supporting People. We know that the losses on the ground are affecting people, and the services they have relied on for so long.
As all the excuses have fallen away, and as the reality of the pace and depth of the Government’s cuts hits home, so Ministers’ accusations and attacks on local government have become more desperate and outlandish. The real impact of these cuts is becoming clearer day by day. Some 450 libraries around the country are under threat of closure, including four in the Prime Minister’s constituency, 250 Sure Start centres serving 60,000 families look set to close by the end of this year, and despite all the Secretary of State’s exhortations, because of the cuts he has imposed half a million British home owners have had their weekly bin collections scrapped. As for housing, his cuts in the housing budget mean that, for all the current Government’s criticism of the last Government’s record, once the homes that Labour started building are completed no new social homes at all will be built for the duration of this Parliament.
When 70p out of every pound councils spend goes on staff, it is madness to believe that people will not lose their jobs. The only advice we have from the Government comes from their big society guru, Lord Wei, who this week told council workers to cut their hours and their pay and spend more time volunteering. That will be of little comfort to the tens, if not hundreds, of thousands of people who lose their jobs this year. According to Unison, 100,000 people in council, health, police, fire and education services have already been warned their jobs are at risk. The GMB has kept a running tally of the number of workers who have been told their jobs are under threat, and, as of last week, it suggests more than 155,000 posts are at risk.
Let us talk about the organisation that has actually conducted some research in this area: the Local Government Association. It believes that 140,000 council workers will lose their jobs this year. I saw the Minister for Housing and Local Government on TV only last night attempting to argue otherwise, but the LGA’s figures are based on evidence—on research covering 202 councils employing 1.85 million people. The Minister’s arguments are based on the hope that, “If we say something enough times, eventually people will start to believe us.”
Mr Clive Betts (Sheffield South East) (Lab)
The Secretary of State has obviously listened to many representations in the past few weeks, but the question is whether he has actually heard what people have been saying and whether he is prepared to act. Today, we have found out that, presumably after prostrating himself on the floor before the Chancellor, he has come away with a further £10 million.
Mr Betts
Local authorities are going to get a further £10 million on top of the settlement they were previously promised. Even if that £10 million was given to one authority, such as Salford, instead of its reduction in total spend being cut from 8.9% to 8.8%, there would hardly be dancing in the streets. Authorities such as mine in Sheffield are getting nothing extra out of that small amount of additional money: they will still get a cut of more than 8%.
Mr Pickles
The figure is £10 million extra to district authorities. That is why the cut for authorities is no longer 8.9% but 8.8%. Extra money has gone in—not a lot, but we have been able to drop the cut a little.
Mr Betts
The Secretary of State’s words are very apposite—it is not a lot of money, but there are an awful lot of reductions up and down the country that local government is having to deal with.
My first point, which I made in a Westminster Hall debate but still have not received an adequate response to is that the overall cuts in Government expenditure over the four-year period are 19%, whereas the cuts for local government are 26%. Why is local government experiencing higher cuts than the overall average cuts to Government spending? We know that the services delivered by local government are important to our constituents. Some of those services go to those in most need—social services provision for aids and adaptations and for looked-after children. Some of them concern quality of life—for example, libraries, parks, playing fields and sports centres—and others are essential, such as refuse collection, street repairs and street lighting.
Most local authorities are doing all they can to protect their social services provision and to protect looked-after children and children with particular disadvantages, so it should come as no surprise that even when they have looked at back-room services and sharing services with other authorities, councils throughout the country of all political persuasions are cutting services such as libraries and bus services and changing their methods of refuse collection.
Henry Smith
Will the hon. Gentleman acknowledge the billions of pounds added to social care budgets in the comprehensive spending review?
Mr Betts
There were ear-marked allocations, including some transferred money from NHS funding, but even so local authorities are facing severe reductions. Westminster, a flagship Conservative authority, is cutting £1 million from its Supporting People budget. Hammersmith and Fulham was named for cutting eight community centres, I understand. Gloucester and Somerset councils are cutting libraries and closing them. Those are cuts in front-line services. Even authorities that are sharing services and cutting management costs still have to cut front-line services. Why has local government been singled out for bigger cuts than the rest of central Government combined?
Brandon Lewis (Great Yarmouth) (Con)
Does the hon. Gentleman acknowledge that local authorities across the country, such as my own in Great Yarmouth—we are a deprived area that has been hit with cuts—have said that they can deal with the changes without affecting front-line services? They are looking to do that through back-office savings and cross-working with other authorities.
Mr Betts
All I can say is that the hon. Gentleman’s authority must have had a much more favourable settlement than many others that are making those cuts. That is not happening on a party political basis. Conservative and Lib Dem authorities are making cuts as well. I am more than happy to receive a list from the Secretary of State of all the authorities that are managing the process without any cuts in front-line services. It will not include many Conservative and Lib Dem authorities, which are presumably making cuts not to spite the Government, but because of the position that they have been put in by the Government.
Mr Betts
I am sorry, but I must make progress. Other Members want to speak in the debate.
My next point is one made by the Local Government Association on a cross-party basis. Why are the cuts front-end loaded? Will someone explain? Even if the Government feel that they have to make the cuts over the four-year period, why are they front-end loaded?
Simon Kirby
Does the hon. Gentleman think it is right that this country is paying £120 million per day to service the interest on the debt that his Government ran up?
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?
Mr Betts
—over which authorities do not have discretion. The figures include the housing revenue account and working capital that is needed to manage the cash flow of an authority, and they probably include identified sums in the authority’s capital accounts for major projects. All those things tend to get lumped together. The Secretary of State says that is not true. If he produced a list of figures for each local authority that extracts all those sums, that would be very interesting to see. I look forward to a copy of that being placed in the Library.
Paul Goggins
My hon. Friend might like to comment on the claim made by the hon. Member for Dover (Charlie Elphicke), because Manchester city council will have to spend £60 million of its reserves simply making people redundant as a result of the cuts.
Mr Betts
The Secretary of State has had an exchange of letters with the Conservative chair of the Local Government Association, who has complained bitterly that if more than £200 million is required nationally in capitalisation to pay for redundancy costs, that will result in a further cut in the grant to pay for it.
I will move on to the spread of the cuts. It is undoubtedly true that local authorities in the most deprived areas are getting the biggest cuts. Government Members will say that those authorities have the biggest grants, which by and large is true, but that is because they have the biggest needs and the most deprivation. The reality is that my local authority is getting more than an 8% reduction in its spending powers and Dorset county council is getting an increase. That is simply not fair.
Mr Betts
I have already given way to the hon. Gentleman and think that that is reasonably fair. The spread of the cuts is simply not fair. I accept that the Government have provided an element of transitional grant to help those authorities with most deprivation, but they simply have not gone far enough to protect those with the most needs and the most deprivation. That is why those areas now face the biggest cuts in services.
Ms Louise Bagshawe (Corby) (Con)
Does the hon. Gentleman think that it is right that only months before announcing these job loses, Manchester city council spent £150,000 on a statue, which could have funded nine junior posts for a year?
Mr Betts
Manchester city council has to make its own local decisions, and I am not here to support or defend every action of every local authority. I thought that leaving such matters to local councils was what localism was all about. We must not put them in the position where they have to make cuts in front-line services, as Somerset, Gloucester and other authorities are having to do.
I support what the Government are doing on ring-fencing. I believe, as I have been saying for many years, that abolishing ring-fencing as far as possible is the right thing to do so that local authorities have more discretion in how they spend the money available to them.
On the question of business rates, I followed up with the LGA the issues I raised with the Minister for Housing and Local Government in my Westminster Hall debate. It has received legal advice on the matter from Bevan Brittan solicitors, which states that in this instance the Secretary of State has not set the distributable amount as a sum equal to the difference, but has chosen to budget for a surplus and set the distributable amount some £100 million lower at £19,000 million. That is simply unlawful, and that is the legal opinion the LGA has received—[Interruption.] I am raising the issue with the Secretary of State and giving the advice that the LGA has given me. If it is inaccurate, will he publish a precise assessment on whether he intends to budget for a surplus on the business rates and whether he believes to do so is lawful so that Members have the full and proper picture?
Mr Pickles
The hon. Gentleman occupies a senior position and so should know that all business rates have to be redistributed to councils by law. It is not possible to do what he is suggesting we are doing, because nothing can be done with a surplus other than giving it back to local authorities. He does not seem to appreciate that total public expenditure is within an envelope, but revenues from business rates go up and down, so councils are compensated by central Government.
Mr Betts
I understand that revenues from business rates go up and down, so when they go up more should be distributed to local authorities as a result. [Interruption.] Rather than engaging in further debate on this, I am happy to pass on to the Secretary of State the legal advice that the LGA has given me and ask him, if he believes that it is wrong, to issue a detailed correction. That seems an appropriate way to proceed.
Mr Betts
I will of course send the letter to the Secretary of State, and I look forward to his response.
On the question of putting salaries above £58,000 into the public domain, the point made by my right hon. Friend the Member for Don Valley (Caroline Flint) ought to be pursued. If the Secretary of State is right, and he encourages local authorities to put more and more services out to the private sector, to the voluntary sector and to social enterprise, he will find that fewer people on those salaries are employed in the local authority sector. Somebody with responsibility for a service might be “TUPE’d” outwith that service to the private sector or to a social enterprise, in which case his transparency will therefore decline. So, when services are contracted out, could the requirement for transparency about salaries of more than £58,000 be transferred as well, and applied to contractors across the piece? That would be a way forward for the Secretary of State, and his Cabinet colleagues might like to look at it as a good example of transparency in practice.
The figures on Sheffield are misleading. The figures that have been quoted are for those redundancies that have been announced so far. Many vacancies in Sheffield are being held unfilled, and they are going to affect services. We know of several hundred posts that will not be filled by one means or other, and we also suspect that the Lib Dem administration there is trying to delay and avoid decisions, waiting to pass them on to the new Labour administration that will take office in May. The budget has not yet been finalised, however, so no one can quote a figure of 250. Several hundred jobs are likely to be lost as a result of the budget—many times the figure given today.
There are real problems with the settlement, but the fundamental question that comes across from local councils and the Local Government Association is, “Why are the cuts front-loaded?” Can the Government please provide an explanation? That fundamental problem is causing chaos in local authorities and massive cuts to services throughout the country.
The Minister for Housing and Local Government (Grant Shapps)
It must have been an incredible experience to stand at this Dispatch Box for the local government finance settlement in any of the past few years and announce on a whim yet more money being piled up and sent around the country in various directions. Unfortunately, we do not live in that kind of world today, and the sad thing is that we did not live in that kind of world even then. The previous Government thought that they had money to spend, but the truth was that it had long since been spent. A year ago, all they were doing was standing here and spending money that had never been raised, that was not available and that would actually have to come from the children of every Member of the House and of all our constituents for many years to come.
At the election, people had a choice, and their decision was to elect a Government who were primarily going to get on with cutting the deficit. Today, however, there has been not a word of apology from the Opposition for getting us into that enormous financial mess that meant that this country had the highest deficit of any country in the western world—of any OECD top 20 country. Do they recognise that as a fact? Do they understand where things went wrong? Are they here today to apologise and to show that they are going to set a new path? Absolutely not, because as we saw at lunchtime the policy vacuum on the Opposition Benches is quite literally a booklet with empty blank pages inside.
There has been no response and no sense of where those cuts would fall. The Opposition do say that there would be some cuts; it is just that we are not allowed to know where they would fall. The Opposition accept that local government spends a quarter of all government money, but it seems that none of those cuts would be in any way painful under their budget, which, they say, would halve the deficit over this Parliament.
Halving the deficit, however, is not enough. I believe there is a fundamental misunderstanding of how this country’s accounts work. Indeed, perhaps that was the problem over 13 years: the previous Government did not understand that, if we only halve the deficit, we will still pile up debt. The figure of £44 billion, which we are currently spending at record interest rates just on repaying the interest alone, would have gone up to £70 billion and more, yet the Opposition have not a single answer—not a single penny—to offer up to this debate. Therefore, their contribution has been all but pointless.
Mr Betts
The right hon. Gentleman refers to past debates. Can he point to any occasion over the years when the Opposition Front-Bench spokesperson said that the Government were providing too much money to local councils? Can he provide one example of a Conservative MP saying, “My council’s getting too much money in this settlement”?
Grant Shapps
The Chairman of the Communities and Local Government Committee is absolutely right: my colleagues and I have been reflecting over the past few weeks, when the representatives of many local authorities throughout the country have been to see us, on what it must have been like to have been in a previous Administration, when one could believe that money was no object—that one could simply get this thing from the money tree and spend it as one wished by giving higher and higher settlements to every authority that came to visit. How wonderful it must have been, but I am afraid that the truth, the reality, has come home to roost, and once again we are left to sort out the mess that Labour has left us with.
Having accepted that there should be some reductions, it was not as if the right hon. Member for Don Valley (Caroline Flint), who shadows the Department, was able to agree with any of the methods that might be used to make reductions without harming front-line services. In fact, she went so far as to ridicule my hon. Friend the Member for Daventry (Chris Heaton-Harris) because he mentioned in an intervention that Hampshire council has just announced that it will cut £7 million next year by cutting the senior management salaries and work force. That was pooh-poohed as impossible. Well, for the sake of clarity, I have managed to get hold of a copy of that detailed information, and my hon. Friend was wrong: it is not £7 million that will be saved by cutting senior management; in fact, it is £7.9 million.
The idea that money cannot be saved or that leadership cannot be shown by example when senior people take a cut, as Ministers in this Government have with a five-year pay freeze, or that that does not have an impact further down the line on the rest of senior and middle management, has been blown apart. The authorities that have taken such steps have found it much easier to sell to the rest of the authority the difficult decisions that have had to be made.
Nor is the right hon. Lady correct when she talks about the £10 billion of reserves. There are £10 billion of reserves for local authorities, as has already been pointed out in an intervention, but the right hon. Lady says that 70% of it has been earmarked, and, in that, she makes a fundamental mistake, which I am surprised about, because she was in this Department when in government. The reality is that “earmarked” is not the same as “spent” or “allocated”. “Earmarked” does not mean that the money cannot be used in the intervening period to ensure that front-loaded reductions, which we have heard a lot about, can be handled in a much better way.
My hon. Friend the Member for Isle of Wight (Mr Turner) raised a serious technical issue that he had already come to ask us to look at again. We did do that, but we could not find in favour of his local authority. However, I say to him and to all other hon. Members that we thought that the concessionary fares mess that had been left by the previous Government required some assistance to sort out between the two tiers of government. I hope that that is helpful.
The Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), referred particularly to front-loading. As I said to the right hon. Member for Don Valley, it is possible to use earmarked funds that are in the reserves. I invite the hon. Gentleman’s Committee to look at this again, as there seems to be some misunderstanding. I welcome the fact that he welcomes the end of ring-fencing, which had been called for very widely across government and the Local Government Association. Ring-fencing has been un-ring-fenced by some £7 billion, and that has given local authorities a lot more flexibility. We have taken 90 separate budgets and combined them into just 10, meaning that local authorities that are savvy and understand that the situation has changed are able to move much more quickly.
The issue of business rates was raised by the hon. Member for Sheffield South East and others. There is a suggestion out there, which is gaining some credibility, that if business rates were collected at a higher level than the entire local government finance settlement, then the difference could be redistributed somewhere down the line. People need to understand that if business rate collection goes up or down, the amount that goes to local authorities is identical; it makes no difference. The amount that goes to local authorities is set out in the spending review envelope; it is insured by the Treasury, as it were. I hope that that clarifies the situation.