Funding for Local Authorities

Debate between Daniel Kawczynski and Anne Marie Morris

Thursday 10th October 2013 Commons Chamber

[Anne Marie Morris]

No survey is perfect, but I do not believe that this one is any less representative than any other. I think that the findings are good.

[Daniel Kawczynski]

My hon. Friend rightly mentions the important ICM survey. Six out of 10 people think that services are better than they were in 2008. Does that not exemplify the point that, by utilising resources more effectively, services can be provided without increasing council tax massively?

[Anne Marie Morris]

My hon. Friend is quite right.

The challenge is to ensure that, in rural areas, we get the job done. As has been mentioned, there are problems with the way in which the Government define rural—whether we should use the shire definition, the rural-80 or the rural-50—and with how damping was applied. There are questions to be asked about whether that was done in an appropriate way. As has also been mentioned, there has been some top-slicing of the new homes bonus, so some money that would have gone to local government is going to local enterprise partnerships. Those are all issues that the Government could sensibly look at.

The Government have said that rural areas must do the right thing. They have said that what they proposed for rural areas was fair because there was still fat to be cut. In Devon, council tax has been frozen for the past three years, 3,000 staff have been lost, spending has been cut by £100 million and 98% of council tax is being collected. Fraud accounts for only 0.003% of the budget, which is a very small amount in the grand scheme of things. Our reserves are also relatively modest. There are two separate pots, but the one for ongoing operational costs covers only two days of operating costs and the other covers planned future development.

I understand what the Government are trying to do—we must clearly manage costs—but Devon has done its best to manage its books. It now has to find £130 million of savings. It has looked hard and is now looking for the last £46 million. It is looking at some of the areas that were mentioned by the hon. Member for Penistone and Stocksbridge (Angela Smith): youth services, day care centres, libraries, residential care, children’s centres and community transport. I absolutely agree with her that those things matter.

The challenge is how we address this matter. I say to the Government: let us walk the walk and not just talk the talk. Let us be honest that there was something not quite right in the funding formula and look at it again. Let us also be honest about the top-slicing of the new homes bonus. My concern is that LEPs have not been running for very long. Although I am sure that some of them are more than capable of sensibly using a top-sliced chunk for infrastructure projects, there are others that are very early in their development. Many councils have been planning infrastructure projects for a long time, but now find that the funding is being moved to another body. That should give us pause for thought.

The two areas of dissatisfaction in the ICM survey were potholes and care for older people. Devon has £700 million-worth of work on the roads that has not been done, never mind the problems that are caused by the winter. If we are to reform local government spending, we must look at the Bellwin formula. The way in which it was calculated meant that it gave Devon only half of what it needed to get the roads back in order. As my hon. Friend the Member for Tiverton and Honiton mentioned, that was partly because we have 8,000 miles of road to deal with.

Buses are another key issue. As my hon. Friend the Member for Tiverton and Honiton said, bus passes costs us £10 million and we then have £5 million left to spend on public buses. He said that many people rely on public buses to get to work. Indeed, whether it is to get to work or for any other purpose, more people use the buses than the trains, so it is short-sighted to fail to provide funding for that.

Of course, we cannot forget education and schools. Devon is almost, although not quite, at the bottom of the league table. It is 145th out of the 151 local education authorities. It receives £395 per pupil below the average. Given the additional costs because of transportation and the size of the schools, that is untenable. The Government have recognised that, but we need them to do something.

The Government have promised to put some money from the NHS into local government. However, there is a lack of clarity about how that will happen and how much money it will be. Without that information, it is difficult for local government to sort out its finances.

Finally, although it is absolutely right that communities should work with local authorities to do what they can together, leaving it to the local community to pick up all the work that cannot be afforded is not realistic. A number of community transport groups have come to me because demand well outstrips supply. They are struggling to cope with the number of people who are trying to get to hospital appointments, many of whom have wheelchairs. There are simply not enough drivers or vehicles. We applaud those in the voluntary sector for the fantastic job that they do, but, as the squeeze comes, we need to recognise that they cannot completely fill the gap and that they need help and support in trying to do so.