Local Government Finance

Gareth Snell Excerpts

Wednesday 7th February 2018 Commons Chamber

[Sajid Javid]

My hon. Friend makes a very important point about ensuring full co-operation throughout all Government Departments working jointly with our local authorities on fairness and distribution. One way we have tried to make the settlement fair is by recognising the special factors that affect rural areas, including Shropshire. My hon. Friend’s council in Shropshire will benefit from £6.6 million in rural services delivery grant.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The Conservative portfolio holder for finance on Stoke-on-Trent City Council says that it will lose £15 million of central Government grant over the next two years—that is Stoke-on-Trent with hyphens for the Secretary of State’s PPS, as he diligently searches his folder—but the Secretary of State will tell me that our revenue spending will be going up. Who is not telling me the truth? It cannot be the case that spending is going up when the portfolio holder tells me that the grant is being cut.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Before the Secretary of State answers, I must say that interventions have to be short. A lot of people want to speak. What is unfair is if people make interventions and then leave, and other people have to sit for three hours waiting to speak. That is just not honourable. I appreciate that the hon. Gentleman is going to be here, but I just make the point about short interventions.

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[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

I commend the hon. Member for Wellingborough (Mr Bone) for his speech. The simple answer in his case is that the Conservative councillors on Northamptonshire County Council could find the fortitude simply to no-confidence the existing leader, rather than trying to get the Lords Commissioners to do the dirty work for them, but it seems that they would rather abdicate responsibility in that sense as well.

While I am on my feet, I wish to draw attention to the comments made earlier by the new Secretary of State for Housing, Communities, Local Government and other subjects—the list seems to be growing every day.

[Jim McMahon]

Don’t forget bins.

[Gareth Snell]

Yes, obviously he is the Minister for Bins.

The Secretary of State said that Stoke-on-Trent City Council would see an increase in its funding abilities. I have just double-checked the figures published by the Conservative portfolio holder for finance on Stoke-on-Trent City Council, and they say that £32 million needs to be cut over the next two years. Either the Conservative Minister in this place was misinformed or the Conservative deputy leader of Stoke-on-Trent City Council is providing misinformation to the public. Those two statements cannot be reconciled without someone saying they are wrong. That is the nub of today’s debate. Conservative Members are quite happy to throw around terminology and certain figures simply to prove a point that they are not cutting local government, but anybody in this place who has been involved in local government knows that they are.

I apologise, Mr Speaker. I should have drawn attention at the beginning of my speech to my declaration in the Register of Members’ Financial Interests: I am a serving district councillor in a shire county, so I understand the points made by the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) about the deprivation that exists in shire counties. However, I represent Stoke-on-Trent, and what he fails to understand is that this is not necessarily about the absolute level of deprivation, but the number of people for whom those services are needed—the number of children in care and the number of older people requiring complex social care. That simply cannot be compared in a city and a county as though it is apples and apples, because it is not; it is apples and pears at best.

As my hon. Friend the Member for Nottingham North (Alex Norris) made clear, the cuts being inflicted on local government are causing councils to make very short-term decisions year on year to balance budgets, because they cannot make illegal budgets—they are not able to deliver any budget that is not balanced. In the case of Stoke-on-Trent, £1 million will be taken out of the homelessness budget. That will not end homelessness, but drive more people towards A&E services and peripheral services funded by the clinical commissioning group, the police and crime commissioner or other funders that will then be asked by their departments to make their own savings. We have a circular system of cuts that do not help the individuals on which they are focused. Again, Stoke-on-Trent City Council is looking to cut £751,000 from its drug and alcohol support service by 2019-20. If, as the Secretary of State says, there is more money coming into Stoke-on-Trent, I do not understand why such political choices are being made.

It is not only Labour councillors and Labour Members who are saying this; Lord Porter, the chair of the Local Government Association, has said:

“Years of unprecedented central government funding cuts have left many councils beyond the point where council tax income can be expected to plug the…gaps”

alone. If Conservative Members will not listen to Labour Members, perhaps they will listen to their own peers who are experts in this field. Quite frankly, if Lord Porter is saying that there is a problem with local government funding, we should all sit up and listen because he knows what he is talking about.

I want to touch briefly not on the funding arrangements in Stoke-on-Trent, but, although the Secretary of State is no longer in his place, on the issues in Bromsgrove. It is one thing for the Secretary of State to tell me that my council has no problems, but another for his own council in Bromsgrove to predict a £1 million shortfall over the next three years and to have to put up council tax by 3% and for the county council to predict a £32 million deficit over the next year and to have to put up council tax by 4.94%. The leader of the county council said in a cabinet report:

“The current…financial year has faced significant financial challenges”.

This is not scaremongering by Labour councils or Labour Members. Tory councils with Tory MPs are making it quite clear that Tory Government cuts are affecting the provision of local government in their own communities.

I am not entirely convinced that the report, for all its fancy words and funny fudging of figures, will actually deliver anything to give the necessary help and support to councils that need it. I will now finish to leave some time for others, but my hon. Friend the Member for Nottingham North said that he is from Robin Hood country. The motion does not give us the redistributive polities of Robin Hood; it is more about robbing the cities and robbing the poor.

The report is about taking money out of areas of deprivation to make sure that rebellious Back Benchers do not decide to sit on their hands and cause the Government a problem this evening. I welcome the fact that the hon. Member for Shrewsbury and Atcham, who is not in his place, has been able to succeed in getting additional funding for his council on a one-off basis, but that is not a long-term solution for the problems faced by local government. As more and more services are pushed by this Government towards local government, it is incumbent on us all to make sure that local government is funded properly and fairly.

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[Wera Hobhouse (Bath) (LD)]

I represent beautiful Bath. Obviously not everyone in Bath is wealthy, but on the whole it is a wealthy area. I am, perhaps, unusual, in that I lived in the north-west for 25 years, and for 10 years represented a local council area that was very deprived. I can tell Conservative Members that that was a real eye-opener. Anyone who wants to see real deprivation should visit the post-industrial towns of the north.

It is disappointing that such a partisan approach has been taken today. Yes, we should represent our own areas—I do that—but we should also make decisions in the round and look at fairness in the round, and we should make the right decisions for the whole country. The proposal we are discussing today is simply not fair. It will disadvantage the disadvantaged further, and it will increase the gap that already exists. I urge Conservative Members to think again and, if necessary, to spend a few years in local government in one of our northern towns.

I want to make a separate point about the overall proposal. The finance of local government and the way we deliver local services have changed beyond recognition in recent years, and that matters for democracy. We talk so much about taking back control these days, but the clearest evidence of democracy in action is at a local level. We deliver so much of what matters in people’s lives through local government, from bin collections and street cleaning, to planning, housing and adult care services.

Until 2014, as I said, I was a councillor for 10 years in a unitary authority. We had clear spending and decision-making powers, and there was a clear line of accountability, but even then our council budgets were dominated by two pressures: efficiency savings and ballooning adult care costs. No Government have properly addressed the problem, but this Government have led a relentless crusade to destroy local government and local democracy. Most schools have been forced to become academies and are now overseen by Whitehall, our local facilities are run under PFI contracts, and more than half of our councils no longer own any social housing stock. Meanwhile, regulatory functions such as trading standards and building regulation control services are outsourced, which is a polite word for privatisation.

Where is the commitment to new resources for social care funding following yet another NHS winter crisis? The figure announced today will not cover the annual £2.3 billion funding gap that is expected by 2020. As homelessness increases and one in 111 children spend Christmas in temporary accommodation or bed and breakfasts, where is the commitment to new social housing so that people have a home to go to? The net cost to councils of providing temporary accommodation has tripled in the past three years. Rising homelessness is costing local government more and more in the long term. The Homelessness Reduction Act 2017 increases the demands on local authorities, but does not provide adequate resources. Even in Bath and North East Somerset, an affluent area, the council’s estimated shortfall will be over £16 million by 2020. Most of the council’s budget—75%—is spent on adult social care services. Just a small increase in that bill will mean that my council faces a financial crisis, and that is in my affluent council area. The situation at Northamptonshire County Council is just the tip of the iceberg.

As with most of what the Government do, their approach is driven not by pragmatic policy, but by small-state ideology. The public sector is to be weakened and replaced at every opportunity by private providers. Local decision making is becoming increasingly powerless.

There is an alternative, and it is rooted in the belief that the public sector can provide good services for local people. Bin collections, schools and care services can be run by councils. A service that is run by local people for local people is normally better than a service managed from many hundreds of miles away. A service that is run for the public interest has different values from a service run for maximum profit.

The debate is yet another dismal display of the Government’s deliberate destruction of local government, and that will continue until crisis after crisis, and tragedy after tragedy, force the Government to rethink. My party is the champion of local government. We believe in local democracy and delivering the best possible services locally.

[Gareth Snell]

I have enjoyed the hon. Lady’s merry dance around the history of her party in government, but her party was relentless in cutting local government to the bone when it was part of the coalition. For her to say now that her party is suddenly the salvation is frankly beyond the pale.

[Wera Hobhouse]

I thank the hon. Gentleman for making that point. I was a councillor in local government. As he knows, when any party is in national government, its members include people on the ground who need to agree to the decisions it makes. Many of us often pointed out how difficult things were for us at the local level, and our party listened and did not support the cuts beyond 2013.

My party is the champion of local government; I am a champion of local government. We believe in local democracy. We believe in delivering the best possible services locally. We believe that local government should be properly and openly funded. Today’s funding proposals leave a gaping hole of £5.8 billion by 2020. This is another terrible settlement for local government, and it does not have the Liberal Democrats’ support.