Local Government Finance

Debate between Derek Twigg and Clive Betts

Wednesday 8th February 2012 Commons Chamber

[Mr Betts]

I thank the Minister for that reply. It is certainly true that there has been a substantial loss of civil servants in the Department for Communities and Local Government, but I did not say that local government expenditure had been cut more than the overheads in the DCLG; I said that it had been cut more than the overall cut in central Government expenditure. That is the reality, and Ministers ought to be prepared to defend it if they believe that local government services are less important.

Secondly, the cuts were front-loaded. Local government itself argued that, if in the end the cuts were going to be made over a four-year period, they should not be front-loaded, because it would mean rushed cuts with a bigger impact on front-line services than if councils had the time to do more about shared services, an issue to which I shall turn in due course. That, too, is the reality.

We are also told that there has been the certainty of a two-year settlement, but local government was given to understand that there would be the certainty of a four-year settlement—an indication of the cuts over a four-year period. It appears that that is not quite the case. The advantages of front-loading, as initially sold, were that at least local councils would know the score for four years, but, now that the Chancellor has to find another £150 billion of borrowing, no doubt he will return to local government to make further cuts in years three and four. Ministers have not referred to that at all so far.

We will then have the cuts that will follow the changes in the Local Government Finance Bill, which is going through Parliament, and the cuts in council tax benefit funding—another uncertainty for local councils. The pretended certainty of last year is, therefore, beginning to unravel in terms of years three and four, and the one good part of the settlement—that councils knew where they were for four years—is apparently no longer the case.

The third point—alongside bigger cuts for local councils, and the fact that they were front-loaded and there is now uncertainty in years three and four—is the unfairness, which my right hon. Friend the Member for Leeds Central (Hilary Benn) amply demonstrated. The Minister could not argue when I intervened on him, because in reality the councils with the greatest need receive the greatest grant, and they are seeing the biggest cuts in Government funding. That is fundamentally unfair.

[Derek Twigg]

My hon. Friend is making a very good speech. On the point about the greatest cuts falling on those with the greatest need, I should say that next year Halton will lose £44 per head; Cheshire East, the Chancellor’s council area, will lose £19 per head. The Prime Minister’s area of Oxfordshire will lose £21 per head. How can that be described as fair?

[Mr Betts]

My hon. Friend makes a good point. I certainly would not describe that as fair, although Ministers apparently would. My constituents certainly do not understand why Sheffield city council is having to cut its budget by more than 10% while other councils have to make cuts of only a tenth of that amount—in percentage terms, let alone in respect of the relative difference per head of population.