Local Government Finance

Dan Rogerson Excerpts

Wednesday 19th December 2012 Commons Chamber

[Mr Pickles]

I am grateful to the right hon. Gentleman. It is entirely typical of him—perhaps he is not a very quick reader—that of the 50 tips he ignored the ones that are going to save billions of pounds, because apparently that is not terribly important. He was part of a Government who promised to deliver £52 billion of cuts. He stands at the Dispatch Box and pretends to local government that it would have faced no cuts under his Government. He knows as well as every single Member of this House that he would have been proposing similar cuts, and that remains the absolute truth. I remind hon. Members that the former Chancellor said in the Labour Budget of March 2010 that there would be £300 million of cuts to regional development agency regeneration, to the working neighbourhood fund—by the way, we picked up the tab for that—to the local enterprise growth initiative, and to the housing and planning delivery grant. On top of that there were £185 million of back-of-a-fag packet cuts to time-limited community programmes and rationalisations of others.

The right hon. Gentleman’s response might best be described as the Jo Moore memorial lecture, because the bad news that she sought to bury on 9/11 was about councillors’ pensions. Just to be clear, the contributions of those who have contributed will be protected, but from the middle of next year they will no longer be able to make a contribution. That will save £7 million, but £7 million probably means absolutely nothing to the right hon. Gentleman.

The right hon. Gentleman talked about Birmingham. Which local authority got itself into the most appalling mess over equal pay when the rest of local government was putting aside sensible savings? Birmingham, which now faces a potential bill of over £700 million. Who is getting Birmingham out of the mess? We are. We will be prepared to allow Birmingham to pay off this sum, which other councils dealt with sensibly over the past 20 years by the sale of assets. Birmingham should be grateful for that. I can further tell the House that out of the departmental expenditure limits—the money from Eland house not relating to local government—we have stumped up £100 million to help Birmingham in this process, because we recognise that it will take some time to deliver the results. Birmingham, and the right hon. Gentleman, would be in a right old mess were it not for us, and I look forward to receiving an apology from him.

The right hon. Gentleman asks why some authorities are actually increasing their spending power and says that it is an outrage. There is just one reason—the new homes bonus. [Interruption.] Oh, yes it is. It is exactly the reason, as the hon. Member for Halton (Derek Twigg) will see if he cares to look at the figures. In that lies the clue to this settlement, which ensures that local authorities now have greater control. That is due not only to the new homes bonus but to the retention of the business rate, which is how local authorities can make a big difference.

The right hon. Gentleman asked about academies. The figure is £150 million and the hold-back is £24 million.

One set of councils is seeking to tax the poor in the way that it is seeking to tax pensioners, widows and single mothers living at home—Labour councils. You will not catch a Tory authority trying to ensure that poor people have to pay 30% of the council tax. That is why we introduced the £100 million—to protect the people who have the misfortune to be represented by a Labour authority.

[Dan Rogerson (North Cornwall) (LD)]

I welcome the localisation measures that the Secretary of State has announced, but he also referred to damping. In previous decades, authorities such as mine have suffered from their distance from the target figures to which the Department says they are entitled. Is there some hope in this for Cornwall? Are we moving away from a damping mechanism that means we will continue to get less money than we should?

[Mr Pickles]

The hon. Gentleman raises an important point and he deserves a serious answer. We looked at whether we would be able to do that. We took advice from local government, which said that it is keen to have some degree of stability through the introduction of the new system. We certainly hope that the people of Cornwall, who are renowned for their enterprise and for living in a wonderful place to visit, will rise to the new funding arrangements. The further away we move from the old formula, the more places such as Cornwall will be able to triumph.