Gordon Marsden
Main Page: Gordon Marsden (Labour - Blackpool South)(11 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Brandon Lewis
I want to make progress.
This is a new dawn for local government. The local funding settlement used to be the end game, but this year it is just the starting point. Councils are no longer tied to the settlement figures, and they can earn their keep and retain £11 billion of business rates, which could deliver around an extra £10 billion to the wider economy by 2020. In recent years, Newcastle, Manchester and Liverpool all saw their business rates rise above the national average of 4.8%, but thanks to the old begging-bowl system, they missed out on the opportunity of making the most of that money. The old formula grant paid to fail, but from here on in, it will be what councils make, not what they take, that counts. If they bring in more business and more jobs, they will be rewarded. If they build more homes they will get the new homes bonus, worth more than £650 million this year and even more in 2014-15. Almost two thirds of authorities are expected to gain from the scheme in the first year alone.
Mr Gordon Marsden (Blackpool South) (Lab)
Is that not a slight sleight of hand? The new homes bonus money is not new money; it has been derived from top-slicing local government funding at national level, as my borough finance officer confirmed to me yesterday.
Brandon Lewis
Yet again, an Opposition Member highlights the fact that they simply do not get it. This is about local authorities getting money for what they do; we are moving to a new way of working. Under the business rates scheme, they will get more money if they bring businesses and jobs in. If they build houses, they will get more money from the new homes bonus. The message to authorities that do not like it is that they should go out and build some houses. Two thirds of authorities are expected to gain, so the message to councils is clear: if they oppose the settlement, they oppose the opportunity for a brighter future. However, if they are self-reliant and ambitious, and work hard on behalf of local people, they will win the day.
This Government are keen to do everything they can to reward radical, forward- thinking councils, so today I am pleased to announce a new incentive for councils to join forces to bring management together, not just sharing the usual back-office functions and services that we hear of, but real front-line changes for the benefit of citizens as well. This is about looking at some of the excellent work done by great authorities and following in the footsteps of some—for example, the tri-borough initiative. Hammersmith and Fulham, Westminster, and Kensington and Chelsea are on track to save around £40 million by 2015-16. We are bringing in a new £9.2 million challenge award to help other councils to follow their lead.
I want councils such as West Somerset, which was mentioned on Monday—
Mr Gordon Marsden (Blackpool South) (Lab)
As the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis) who opened the debate moved to the apotheosis of a speech that, sadly, was rather shot through with bombast and self-satisfaction, he delivered the stirring words that putting councils in charge of their own destiny was the centre point of this local government statement. In the time allowed I would like to look at one council—my own council in Blackpool—and see what it has done to put itself in charge of its own destiny and how it has been affected by the way the Government have dealt with it.
As a small unitary authority, Blackpool is entering a difficult situation and difficult narrative due to Government cuts over the past two years. According to the multiple deprivation index, it is the sixth most deprived council in the country, and in that respect resembles a number of other seaside and coastal towns that have pockets of severe deprivation—such as the Minister’s council in Great Yarmouth, for example. Most of those areas, including many in the north, were hit badly by the removal of area based grants, which, as we have heard, were famously defended by a former Minister because most must be cut from those who have received the most.
Blackpool does not benefit from any dedicated funding because of the level of transience, and there is no acknowledgement in its health funding of the extra burdens placed on services by visitor numbers. On the heat register, Blackpool will lose an average of £215 per person over four years, and £83 over two years. My council has had funding cuts of 19.2% for the past two years. It has lost £40 million over the past two years, with approximately £14 million of further cuts in 2013-14 and approximately £20 million more over the next two years. I noticed that the Minister waxed lyrical about profligate councils sitting around with big reserves, but Blackpool council’s current reserve stands at £4 million, out of a proposed net expenditure budget for 2013-14 of £150 million.
Like many other councils we have heard about this evening, Blackpool has done many of the things that Ministers have preached should be prudent for local government to do. It has worked on ways to cut waste in a major way and cut a whole level of senior officers. Sadly, it has had to lose hundreds of posts and hundreds of jobs over the last two years, with 300 posts proposed to go this year. Blackpool has also frozen the council tax, but—of course, the Minister did not tell us this—that is on the basis of a grant of only 1% this year as opposed to 2.5% for previous years. Despite all that, Blackpool council has gone ahead with progressive measures, including moving towards a living wage for its workers and free breakfast clubs, so it does not need to take any lessons from Ministers about that. The cash reduction in this year’s Government settlement is £3 million. The council tax freeze grant, to which I have referred, means a further loss of £1.5 million, with demographic pressures from children’s social care of £1.1 million.
Let me turn to the council tax changes and the basis on which they are taking place. As we heard from my right hon. Friend the Member for Leeds Central (Hilary Benn), the shadow Secretary of State, millions of people in England on low incomes face rising council tax this year, including those who will now have to contribute to council tax who have previously been exempt. What will that figure of £410 million and a 10% cut in funding do for people in Blackpool? In Blackpool, it means a tax rise on a large number of people on low incomes. Like most seaside and coastal towns, we have people doing two or three part-time jobs, many of them women. We have larger than average numbers of older people and disabled people, which has specific implications for the amount that my council will now be forced to charge those who are not exempt, because this Government have decided that pensioners should be exempt from contributing to the council tax support scheme.
However, the more pensioners and older people an area has—it is a well known and established fact that large numbers of old people move into seaside and coastal towns—the higher the level of account that has to be placed on other people. Who are those other people? They are not the millionaires, who will receive a tax cut; they are people working hard on low incomes—carers, the disabled and single mums. They are people who are already being hit by the Government’s cuts in the uprating of benefits and working families tax credit. They are the people who will suffer and whom my council will not be able to protect from the depredations of this Government.
The Minister who opened this debate comes from a seaside town. He knows of some of these issues. Perhaps if he were to move away from the distorting mirror that he has had inserted in his little red ministerial box—
Mr Marsden
Well yours might be, but I am not sure about the Minister who opened this debate.
If the Minister got away from that distorting mirror and went back to his constituents in Great Yarmouth—to some of the houses in multiple occupation, the people living in bad private housing or some of those groups of his constituents who will be most affected—perhaps he would not come to this House with a speech so full of complacency and smugness.
Brandon Lewis
I wonder whether the hon. Gentleman is talking about the same people who will now benefit from the £7 million transitional grant or the next £4 million to £5 million of efficiency grant that the council will get, following the cliff edge left by the last Labour Government, leaving them without that money.
Mr Marsden
I am interested that the Minister has turned to the transitional grant, because in percentage terms the average transitional grant will cover only a quarter of the original 10% cuts. It just so happens that my council in Blackpool will receive the lowest proportion of the transitional grant, so I am afraid the Minister will win no plaudits from Opposition Members or, I suspect, from many of his own constituents for the settlement he has imposed on them. The reality of this settlement is that it is unfair and unjust for some of the poorest people who are working hard as carers, part-time workers and single mums. Such people in Blackpool and many other places can ill afford to pay this money, and the Government should be ashamed of the incoherent and unequal settlement that they have put before the House.