Local Government Finance (England)

Debate between Clive Betts and Dan Rogerson

Wednesday 13th February 2013 Commons Chamber

[Mr Clive Betts (Sheffield South East) (Lab)]

Clearly these are difficult times. As my right hon. Friend the Member for Leeds Central (Hilary Benn) said from the Front Bench, there will have to be reductions in local government spending. Our task today is to examine whether the cuts that have been made are fair and reasonable.

Let us look at what the Local Government Association has said. It calculates that, over the four-year period of the comprehensive spending review, local council spending power will be reduced in real terms by a third. That is a significant reduction—indeed, a massive reduction. We are not just talking about local council spending; we are talking about the services that the money is spent on and the effect of the withdrawal of those services on our local communities. The Minister talked about hard-working council tax payers, and, of course, council tax payers are, by and large, hard working; but not once did he refer to hard-working recipients of council services. People will now lose those services, which in many cases they rely on. It seems as though the Government are saying to our country and the public at large that libraries, parks, environmental health and adult social care are, in some way, second-rate services that we should have less regard for, because they are prepared to make cuts of a third to those services, but cuts of only 20% across the board to other Government services. What they are really saying is that those local services, which our communities value so much, are worth less and should be esteemed less than other things the Government do.

I have to say that a little bit of me has started to wonder whether it is more comfortable for Ministers to see councils and councillors as something of a human shield—people they can hide behind or to whom they can say, “You’re the people to blame in your local council chambers.” They are the people the public can get at for making the cuts that are affecting them. There is someone between Ministers and the impact on local communities of the cuts they are making to council services. The councillors can always be blamed, and I am very concerned that it is easier for Ministers to make cuts in this area.

Councils have always been very good. Under the Labour Government, when we used to have increases in council funding each year, councils were always required to make 2% efficiency savings a year. It is interesting that in the latest MORI poll two thirds of the public said that they had not yet noticed any impact from council cuts on their lives. That will change, but it shows how good councils have been so far in absorbing the savings and achieving the efficiencies that have been requested of them. But people will be affected and, frankly, the Secretary of State’s 50 ways to save the world will not save our local service.

The Minister talked about the pennies being important. Of course saving pennies is important. When I went to a meeting at Sheffield council the other day I did not get tea or coffee and biscuits. They were not provided. When I do my surgery at Crystal Peaks library on Saturday morning, there is a private coffee shop in the foyer which the council has rented out. Those are the sorts of things that are being done. Sheffield has a brilliant record of collecting council tax—a 99% collection rate—although that is likely to change with the changes to council tax benefits, when it will have to try to get £2, £3 or £4 from people who cannot afford it. We have saved more than £2 million a year through going to an alternate-week bin collection, and I have not had a single member of the public write to me with a discarded chicken masala in hand saying, “Our human rights have been breached by this terrible change.” It has gone very smoothly, and recycling is now rising as a result.

Over a four-year period, Sheffield council will have to save £230 million. That is a reduction in spending power of £200 a head, but other councils—such as Windsor and Maidenhead, and Richmond upon Thames—have to make savings of less than £40 a head. That is five times more in Sheffield than other authorities. The Minister will say that Sheffield gets more grant, and because it has had more grant, there is more grant to cut. But Sheffield, like other cities, has had more grant because it has fewer resources and more need than other areas. Ministers are taking grant from areas that have traditionally had more grant, but those are the poorest, most deprived communities where the cuts are hitting hardest. That is simple reality.

[Dan Rogerson (North Cornwall) (LD)]

The hon. Gentleman is right to say that deprivation is a key part of the formula. It always has been and it always should be. But, as I understand it, a density factor was added to the formula by the previous Government for which there is no justification, as it is cheaper to provide services in areas that are more densely populated. That is the sort of issue that we need to resolve in coming years.

[Mr Betts]

There are lots of factors that have been put into the formula in the past. We can all make arguments about the details. For example, it is more expensive to provide services in Sheffield because of its topography. We have hills, so construction costs, such as for the tram, go up. But on the index of deprivation, the most deprived areas will get the biggest cuts. There is no argument about that—if there were, Ministers would be jumping up to the Dispatch Box to deny it.

The Secretary of State says, “It is all right, councils have got reserves. There is no need for cuts.” That is not true. Yes, Sheffield has around £150 million of reserves, but more than £25 million of it is held for schools, and it cannot spend that; £25 million is in the housing account, ring-fenced and dedicated; some £50 million is to be allocated for capital projects; and then there is the money that has to be used to match-fund a PFI scheme that the Government have just approved—I give credit to them for taking forward that Labour scheme. That leaves around £11 million of reserves, and it would be folly for the council to put that money into services next year and leave itself with no reserves. So the council is being prudent and appropriate, as are most councils, in how it deals with that issue.