Local Government Finance

Gordon Marsden Excerpts

Wednesday 12th February 2014 Commons Chamber

[Mr Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to follow the hon. Member for North Devon (Sir Nick Harvey). What he said threw into sharp relief what had been said by the Minister, whose speech elevated George Orwell’s newspeak to a fine art. As the hon. Gentleman made clear, the Minister paraded his shop-soiled mantra about spending power, but objective observers might think that it was more about the freedom to dine at the Ritz.

I make no apology for focusing on the particular problems of my own town and my own council, because Blackpool, which is sixth in the index of multiple deprivation, will have suffered a cumulative cut of 20.6% between 2010 and 2016. We were hit particularly hard by the abolition of the area-based grants in the first emergency budget. The present process takes very little account of the special circumstances of towns such as Blackpool, which are experiencing pressures from incomers on services such as housing and social care. We have also been hit extremely hard by the demographic double whammy of the bedroom tax and cuts in council tax benefit, which others have already mentioned.

However, it is not just a question of the actual hardship; it is also a question of the process. Our local authority has been notified of a 2014-15 in-year new homes bonus of £25,000, the second lowest in the country. The borough treasurer says that that is due to earlier than planned demolition of the Queens Park estate and conversion programmes for houses in multiple occupation, two very worthy initiatives for which Blackpool appears to have been perversely penalised.

The cumulative budget cuts for what is one of the smallest unitary authorities in the country are expected to amount to £88 million over the five years between 2011 and 2015-16. Last week, in a report to the executive, the borough treasurer pointed out that since the approval of this year’s budget by the full council, there had been six separate announcements from the Treasury and the Department for Communities and Local Government impacting significantly and adversely on Blackpool’s central Government funding allocations for the next two years, and requiring plans for budget cuts to be revisited each time. The discriminatory nature of the proposals is demonstrated by the fact that Blackpool will lose £105 per head, five times more than the losses that will be suffered by the two authorities that will lose the least.

We are also suffering as a result of the proposed £1.1 billion top-slice in the new homes bonus in 2015-16, and the transfer of an estimated 35% of that to local enterprise partnerships. In Blackpool’s case, that means losing £4.4 million of revenue support grant from the new homes bonus top slice, while receiving new homes bonus grant of only about £2.3 million. Overall, Blackpool stands to lose £2.9 million from the transfer.

When the Government make their spending and funding announcements, they should be clear, transparent and unequivocal, rather than revising downwards at a later stage. I speak with feeling because my constituency contains two of the most disadvantaged areas in England with populations of more than 30,000, namely Bloomfield and Brunswick wards. Let me describe the effects of those cuts in human terms. Virtually all the formal youth services have had to go over the last two years. The CCTV budget has been cut, the budget for trams has been cut by £100,000 this year, and the budget for the road safety partnership has also been cut. I could go on.

The reduction in the spending power of areas with higher needs and lower resources, and the changes that the Government are introducing, will not just close the funding difference, but, in time, will potentially reverse it. It is simply wrong that Blackpool should experience a cumulative cut of 20%, when Chichester experiences a 0.2% cut, Spelthorne a 1.2% increase, Reigate a 2% increase, and Surrey Heath a 1% increase. What do all those areas have in common? They are all prosperous, southern, Conservative councils.

We need to help councils to deliver economic growth in all areas of the country. That is why this week’s proposals from my right hon. Friend the Leader of the Opposition and what was said today by my hon. Friend the Member for Corby (Andy Sawford) are so important. Earlier this year, my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) and I produced a pamphlet for the Smith Institute, in which we discussed some of the ways in which Labour councils are already doing things for themselves, and major changes in funding that could be made in the next Parliament.

This Government have worked on the basis of sham localism. They have talked about localism, but they have delivered centralism. We want a fundamental review, and we want to give incentives and initiatives, but that can be done only if everyone works across the boundaries of existing local and central Government and does things together. This Government have completely failed to do that. They have shown no enthusiasm for our Total Place projects, and the bankruptcy of their policies is revealed by the comments that are being made by their own council leaders as well as by ours.