George Hollingbery
Main Page: George Hollingbery (Conservative - Meon Valley)
Mr Denham
I agree with my hon. Friend, and I welcome him to his position as Chair of the Select Committee on Communities and Local Government, to which he will bring considerable experience and knowledge. That is exactly what we offered local government and local services in our last Budget, which offered a wide range and scope for local services to pool their money and use it in new ways. That is why I was confident that we could both deliver our deficit reduction programme and protect front-line services, but as my hon. Friend says, it can work only when it is backed from the top. There is no mention of it in the Budget or in the Red Book, and every Government policy works against that sensible, coherent approach. The Government are not just slashing local spending: they are fragmenting it. There is no point in giving councils more and more control over disappearing funds if, at the same time, school spending is disappearing into academies and free schools, if the chance to work with health money disappears into hundreds of GP budgets or if police funding rides off into the sunset with an elected sheriff. [Interruption.] I am sure that the hon. Member for Meon Valley (George Hollingbery) is right. I shall come to him in due course.
I do not know whether the Secretary of State simply lost all those arguments or whether he never made them, but he has not done well. I shall give way now to the hon. Member for Meon Valley and later to the hon. Member for Mole Valley (Sir Paul Beresford).
George Hollingbery
I am very grateful to the right hon. Gentleman for giving way. First, I make the point that in 13 years of Labour rule, there was little or no integration across local services. Indeed, we could honestly say that silos grew a great deal more than they merged together. We do not need central rules to make that integration happen; in Hampshire, we have Project Integra and PUSH—the partnership for urban South Hampshire—so he will know that there is plenty of co-operation at local council level.
On central control, does the right hon. Gentleman agree that when Winchester city council, of which I was a member for 11 years, made an assessment of the amount of spending it could control under the last Labour Government, it was below 5% of total spending?
Mr Denham
It is useful to have a discussion with a Hampshire MP, as we are both familiar with PUSH, but this is exactly my point: that partnership is very good and very important, but it is limited to the powers held by the local councils. Until those councils are able to help to lead and shape health spending and law and order spending in the area, we will not get the changes that we need.
The hon. Gentleman’s second point is also reasonable, but he overstates it. He calculates that Winchester council did not have the budget for Winchester university—well, no, but nor should it. Winchester council did not have the budget for Winchester prison, or for the benefits bill in Winchester. Not every piece of spending is amenable to transfer to local authorities. However, together with local Government—particularly over the past few years—we did set out that stronger vision for local government. I am desperate that we should not lose that vision, and not just for the purpose of a party political debate here.
The integration of local services is critical now. If the Government prove me wrong I shall be the happiest person in the world, because we shall then have the chance to deliver front-line services that people want in a way that genuinely saves money. Every Member, on whichever side of the House they sit, should be interested in that debate.
Not so long ago, when he was Leader of the Opposition, the Prime Minister said, “If you want to know what a Conservative Government would look like, look at Conservative councils.”
I am happy to give way to the hon. Member for Mole Valley, if he still wishes to intervene. It seems that he does not.
What the Prime Minister said constituted a fair warning. As some of my hon. Friends have already observed, what we are seeing is not the unavoidable consequence of a global recession or even of a Labour Government. The aim of the Tories, limply propped up by the Liberal Democrats, is and always has been to roll back an effective, caring and active state. Their vision is of the budget airline council, the sink-or-swim council, the no-frills council, where town halls offer only the bare minimum of service and people must pay twice to get a good service. I think of councils such as Wandsworth, whose leader said that the council wanted to
“increase charges as far as possible beyond inflation...It is worth taking a trial and error approach”.
I think of councils such as Hammersmith and Fulham, which promise to protect the elderly and then hike up their charges. That council’s leader has said:
“To continue building and publicly investing in the ‘social rent’ template…makes no sense.”
I think of the Tory councils in London that want to knock down the homes of secure tenants and offer them insecure homes at a much higher rent, and of the threats to the future of secure council tenancies that the Minister for Housing has never denied. It is all there.
Yes, the country faces hard decisions as we recover from the global recession, but none of that justifies an ideologically driven attack on the basic idea of decent local services provided by well-run councils. We all know what the Tories are up to, but what are the Liberal Democrats doing supporting them? The answer is that they have sold their souls, and have forfeited the right to call themselves a progressive alternative to the Tories.
Mr Betts
Obviously it would be up to the Government to make any such announcement, but the idea that people should move from communities in the north, where there may be enough housing, to find jobs in the south, where there is a particularly chronic housing shortage, beggars belief. What would people on waiting lists in the south think of someone who arrived there and said, “I will have that house as a matter of priority, because I am moving down here to work”? The policy has not been thought through.
If any Member on the other side of the House can tell me where the mechanism and the funds will come from to enable new social rented housing to be built, I ask him or her to stand up and do so. So far, I have heard nothing from either the Conservatives or the Liberal Democrats. There are no funds for council house building—they have been stalled—and the funds for housing association building are limited. Given the reduction in cross-subsidy from the selling of homes, any money that the Homes and Communities Agency may have to fund housing association accommodation will produce fewer houses. Fewer social houses will be built as a result of this Government’s policies, and I am aware of no commitment from Ministers to rectify the position.
What will the Government do about the overall funding situation? We have heard about 25% cuts, and also about protection for education. Presumably Departments other than those dealing with schools and defence will take a bigger hit. We are assuming that councils will receive at least 30%, but the arrangement is not fair, because we will have to protect adult social services and children’s services. What is left? Libraries, parks, recreation, street cleaning, the environment and refuse collection. It is no use the Secretary of State telling local authorities how to collect their refuse. Will they have the money to pay for one refuse collection a week?
Then we must consider the differing impacts on various councils. I opposed individual council tax caps when our Government introduced them, and refused to vote for them, but let us assume that they are imposed now. At least authorities will receive the same amount of money from council tax, but there will be cuts in their Government grant. Councils with the most deprivation in their areas receive a bigger amount of grant than those with the least deprivation, which receive more of their money from council tax. Council tax is to be frozen but Government grant is to be cut by 25%, which means that the councils that will suffer the biggest cuts in their overall budgets are those with the most deprivation. That is unfair, and we fundamentally oppose it. The Liberal Democrats used to oppose it as well, and it is time that one or two Members on the Government Benches, including the Minister, started to explain how they will make the system fair.
The fact is that the most disadvantaged councils and communities will be hit hardest by the 25% cuts in Government funding. In their areas, library, recreation and street cleaning budgets will be cut in half. If the Minister does not agree with that, he must explain why my figures are wrong. If such facilities as adults’ and children’s services are protected from the 30% cut in the grant, the impact on other services will be dramatic, especially in areas that receive a large amount of Government support because of deprivation.
George Hollingbery
I look forward to working with the hon. Gentleman on the Select Committee. It seems from his eloquent speech this afternoon that I have a great deal to learn. I have to say, however, that I am a little tired of Opposition Members targeting the “Tory shires”, as if that were a pejorative term. We rightly receive less Government support for our citizens than more deprived boroughs, and I accept and understand that. However, the spending that comes to us is for our more deprived citizens, and cuts to our budgets, which have not been topped up as much over recent years as those in others places, are very important to us. We may be wealthier parts of the country, but the people we are looking after are not.
Mr Betts
In the end, the Government grant reflects the amount of deprivation in an area. Clearly, there are deprived people even in affluent areas, but it is about the total amount of deprivation. Certainly other communities have more deprivation and that is why they get more Government funding and they will be harder hit. That is the point that I am making.
Right at the end of the Minister’s speech we got a vague mention of Total Place. It is important that it is developed, but it should not be seen as a panacea. Total Place is at the pilot stage; it has produced some very interesting results and ideas about how public money can be spent better across Departments. The Government have to allow local authorities to take the lead on these matters. The DCLG must get a grip of its colleagues in other Departments and let go of the controls that exist, but that will not deliver overnight savings of 25%. We will not achieve 25% or 30% cuts by efficiency savings; there will be real damage to public services. We must recognise that, and the Government must explain and justify the cuts.
The Secretary of State says that his three priorities are localism, localism and localism, but let us take what the Minister said about refuse collection and people in town halls dictating things. Where is the dictation? The Secretary of State in his new spirit of localism is telling every council in this country how it must empty the bins. It is absolute nonsense. How can we have any trust or faith in a Government who talk about localism and setting local councils free when that is one of their first policy announcements?
It is clear that the Budget package was regressive. That has been shown by the Institute for Fiscal Studies. There was an interesting report in the newspapers at the weekend of an investigation into the totality of the Government cuts by Tim Horton and Howard Reed on behalf of the Fabian society. It showed that when one takes not merely the tax changes but the housing benefit changes and the spending cuts, including local government spending cuts, the poorest 10% of our community will have their spending power cut by six times as much as the richest 10%. That is the impact of the Government’s policy. The Budget was not fair and the cuts that have been made so far to local council budgets are not fair. The deficit is truly being cut on the backs of the poorest in our communities.
George Hollingbery (Meon Valley) (Con)
I offer my congratulations to my hon. Friend the Member for Wolverhampton South West (Paul Uppal), whose eloquence was wonderful to hear. I am delighted to have been in the Chamber for his maiden speech.
The motion today is full of regrets and objections. It harks back to the programmes of the previous Government and makes veiled demands for the reinstatement of spending, but the context is an unprecedented deficit of £156 billion, bequeathed to the coalition Government by the Labour party. My right hon. Friend the Chancellor and many of his Front-Bench colleagues have spent several of the past few days rehearsing the reasons why we need to make savings. They have talked about the need to rebalance the economy, restructure our finances and grow the private sector.
The position in which we find ourselves is wholly unsustainable. As many as 30% of the work force in some areas of our country work for the Government. In 2015-16, social security and tax credit bills are projected to be £222 billion—that is, £3,580 for every man, woman and child in this country. Debt interest payments alone will rise to nearly 10% of all Government spending in the same period. Can it be any surprise at all that international markets have been spooked and that until last Tuesday, our share price—in the form of the price of sterling—was falling away on international markets?
Do Labour Members really think that there could not have been a debt crisis here? I assure them that there could. If credit spreads on UK Treasury stocks had started to move out, that would have been an unmitigated disaster for all of us—every penny borrowed would have begun to cost more and more.
That is the context of the coalition Government’s proposals to make savings of £6.22 billion this year, in year, of which £1.165 billion is to come from local government. The question is whether this is a fair proportion for local government to shoulder, and the simple answer must be yes. Local government represents about a quarter of all UK Government spending, and the reductions proposed are about 20% of spending, so merely in straight proportional terms, this is a fair amount for local government to shoulder.
Of course, as we must all admit, any in-year cuts are very difficult to find; particularly those of us who have been in local government will understand that. With budgets already set, it is a serious challenge to row back. However, the proposals make it clear that huge efforts have been made to protect front-line services, and they make it easier for local councils to prioritise the programmes they feel are most important to their local communities. Including guarantees for funding for schools, Sure Start and other programmes, no council will see its revenue grants cut by more than 2%, and no region by more than 1%.
Formula grant totalling £29 billion has been protected, thus directly supporting front-line services as used by our constituents. Some previously ring-fenced grants have been freed up for authorities to spend as they see fit. This reduction, from 10.6% to 7.7%, represents a welcome first step along the road to phasing out ring-fencing altogether. I recognise, at this point in my remarks, that I am now going down the technical, dry, percentage route that we were warned about a moment ago. The Government have committed to freezing council tax for at least one year, and will seek to do so in the following year, in co-operation with local authorities.
Looking at the motion before us, it is difficult to accept its argument that this programme
“fails to meet this test of fairness”.
It seems to me that every effort has been made to ensure that these cuts have as little impact as possible on council tax payers and, of course, on recipients of services. More than half the savings come as reductions in revenue grants, but in total this represents two thirds of 1% of total revenue funding. Surely no one would suggest that that should be impossible for councils to find. The balance comes in reductions in capital grants, about half of which are specifically allocated.
A number of those savings will seem non-core to many authorities. In my experience, LABGI—the local authority business growth incentives scheme—is regarded by many local authorities as free pocket money. It has done very little to incentivise the building of new businesses, certainly in the area that I come from. I also believe that the housing and planning delivery grant has done little to increase the rate of building of houses and, in any event, current market conditions dictate that there is little that local authorities can do to influence completions at this stage. Even in more difficult areas, such as reductions in funding for the Department for Education and for Supporting People, the changes are targeted at non-core spending.
The motion asks us to condemn
“the failure of the Secretary of State to tell the House or local authorities where £504 million of cuts…will fall”.
I believe that the figure of £504 million is derived from the excellent Library note on this issue. An avid reader of standard note SN/SG/5573 will have seen this text on page 4:
“Of the remaining grants, it was not possible to make allocations to individual authorities as, in most cases, the allocations have yet to be finalised”.
It further says, on the same page:
“Section 4 of this note, reproduced from Annex C of the additional paper, explains the precise changes made to each grant and why, in some cases, it has not been possible to allocate the grant money to individual local authorities”.
I recommend to Labour Members the detailed explanations on pages 9 to 13.
One smaller area of direct savings that I particularly welcome is the abolition of comprehensive area assessments. Having been involved in the “Baby Brother” version applied to district councils, I can personally attest to the uselessness and extraordinarily intrusive nature of these Big Brother-style information-gathering exercises. As the portfolio holder for performance management on Winchester city council, I was responsible for the production of much of the data required, almost none of which helped us to perform better or to manage anything better.
I have two examples that are particular favourites, one of which I will share with the House. It concerns the average time taken to re-let a council house. We had a number of council dwellings that were extremely hard to let, and we worked at that imaginatively and finally began to let them reasonably productively. However, our performance got considerably worse, because it was based on an average of the number of days taken to re-let a council house. That particular statistic took a lot of gathering and managing, but it never once contributed to a single change in a management decision or any improvement in services. The real point about nearly all those figures is that they were never used for anything other than to tick boxes. We collected the data, we sent it in, and the box was ticked. On a similar basis, I very much welcome the commitment to abolish the Standards Board for England. Never has an organisation been so abused for political and personal rivalries as this cumbersome and bureaucratic quango. I, for one, will not mourn its passing—nor, I expect, will many other people.
Finally, I would like to address the ideas involved in the Total Place initiative. I strongly believe that innovative local council officers and deliverers of local services are already more than capable of delivering changes such as those envisaged in Total Place. In southern Hampshire, we have PUSH—the partnership for urban south Hampshire—about which I had words with the shadow Secretary of State earlier, and the Integra arrangement for waste recycling. Only last week, I had a meeting with John Bonney, Hampshire’s chief fire officer. He supports the ambulance service with community responder units that can often respond much faster than ambulance services, and he has saved more lives that way than he manages to save even through fire prevention. A huge amount can be done through initiatives such as Total Place, and that requires the breaking down of silos that was referred to a few moments ago.
My problem with Total Place is that the documents that back it up are of such byzantine complexity that I cannot find my way through them. The practitioner’s guide is so full of flow charts, extraordinary diagrams and management-speak that I, as somebody with an MBA from a decent school in the United States, struggled to make head or tail of it. I therefore say this to the Secretary of State: let us not lose the principle of Total Place, but please let us not follow the terrible bureaucratic nonsense that appears to have been emerging as an end part of the process.
We all regret that cuts have to be made in local government spending at this time. However, these balanced proposals make those cuts in as fair a way as possible, across services in as balanced a way as possible, and without hitting front-line services more than is necessary. I commend them to the House.