Graham Stuart
Main Page: Graham Stuart (Conservative - Beverley and Holderness)Funding for Local Authorities
Graham Stuart Excerpts(10 years, 7 months ago)
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Mr Graham Stuart (Beverley and Holderness) (Con)
I am grateful to my hon. Friend for her support for the rural fair share campaign. One of the problems is that the Government are looking at local government finance, but they are freezing in, not just damping, the inequities that see people in rural areas, who earn less on average than people in urban areas, pay more in council tax and receive fewer services: 50% more goes per head to urban areas than to rural areas. That cannot be frozen and kept in place at a time of change; it must be unwound, and there must be other reforms.
Annette Brooke
I congratulate the hon. Gentleman on the work he has done in leading on this issue. All types of councils have their problems. This is a strong issue, and when there is a problem it does not help to build it in—the whole situation has to be opened out. I mention in passing the concern of parish councils and what will happen to their funding with regard to the local council reduction scheme. Perhaps the Minister will update us on that. I remember attending a meeting with parish councils when the Minister was answering questions on that matter.
In conclusion, local government is facing a tough situation and that has to be accepted. I agree with the hon. Member for Sheffield South East that we should look at what local government does best, pulling local government services together and providing greater opportunities to bring more services together. We believe in localism; let us enable localism to happen. By supporting local initiatives, so much more can be delivered. I agree that local government borrowing that complies with prudential rules should be facilitated. That is a fundamental principle. I want to see more services delivered by local government, not fewer—for there to be a bigger range, with better quality and other services facilitated. Sometime it is right to bring in the voluntary sector, but I agree with my hon. Friend the Member for Newton Abbot (Anne Marie Morris), who made the point that we cannot delegate everything to the voluntary sector.
I hope the Minister will listen. There is a problem. Let us recognise it and support local councils to do what they do best.
Sir Nick Harvey (North Devon) (LD)
It is a pleasure to support my neighbour, the hon. Member for Tiverton and Honiton (Neil Parish), who secured the debate, and to echo some of his points. I also want to pay tribute to the hon. Member for Sheffield South East (Mr Betts), who is not in his seat at the moment but who made a powerful speech, drawing on his many years in local government. It was completely impartial in being equally rude about everyone as he set about his exposition of local government and he made some good points.
I am as committed as anyone on these Benches to the Government’s drive to get the deficit under control. It was inevitable that local government would play its part in the deep cuts that had to be made to public services in the course of the past three years. Local government has played its part; big cuts have been made. In my county, Devon, we have seen cuts to bus services, children’s services, libraries, social care and many others. As the polls to which other participants in the debate have referred are showing, we have just about got away with it. The public are still with it and are still expressing confidence in the services that local government is providing, but, looking at the funding settlement for this year and what that will mean for councils in the next three, I sincerely doubt that another poll taken in three years’ time would show anything like that satisfaction level. I believe that councils up and down the country, regardless of their political leadership and of whether they are in rural or urban areas, have set about driving down their costs, have done everything they plausibly can to secure better value for money and have struggled, as far as they are able, to do so without damaging front-line services. But we have got way past the point where they can be expected to do so again without its having a profound impact on front-line services. I simply do not think that the Government will get away with this if they go through with it on the scale they are currently planning.
People have stomached, more or less, the austerity measures of the past three years because they have seen the grim economic picture that has made them necessary, but as more and more Government spokesmen get up and, rightly, talk up the fact that economic recovery is showing signs of getting under way—we would all hope that that continues and gains momentum over the next two or three years—it will become increasingly inexplicable to people that their public services are being eroded to nothing. I echo the comments made by others when I say that people come to my constituency surgery and say, “It is all very nice having a shiny bus pass, but it is not a lot of use if there isn’t a bus that I can catch.”
Speaking personally, the road outside my house has now collapsed on both sides. There is a sheer drop. There is just about a car’s width that it is possible to drive on. I have asked the county council when it intends to repair it and I am told it will not be repaired for two years. If that is typical of what is going on, particularly in authorities that, like Devon, have vast expanses of highway to maintain, the public will not tolerate it, and neither should those who represent them. That reflects the dissatisfaction that we have heard from many Members during this debate.
By 2015-16, Devon county council’s revenue support grant from Government will have been reduced by around 60% in just four financial years. It will have to make another £113 million of cuts in the next three years, on top of the £100 million of cuts that it has already made. We can talk about tough choices as much as we like, but we are going to see complete areas of public service ceasing altogether. I do not believe that the public understand, are ready for or are in any sense willing to put up with that.
The situation for the district council in my area, North Devon district council, is just as bad. It will have experienced a 40% cut in the Government grant to its services, and that will mean that by 2015 the size of its budget will have come down by a third in cash terms since the start of this Parliament.
All this suggests to me that although cuts across the board are absolutely necessary, the Department for Communities and Local Government is taking more than its fair share of the cuts, even in the grim scenario that we are all familiar with.
But the main purpose of my contribution to this afternoon’s debate is to flag up in absolutely clear terms that the disparity between the treatment of rural and urban areas is simply no longer tolerable. It cannot be right that the grant support coming to people living in a rural area is 50% less per head than that going to people living in an urban area. That is £130 a year per head less grant support coming into rural areas than goes into urban areas. In consequence, people are paying £83 more on their council tax bill.
The rural areas of England and Wales are the poorest in the country. That takes a bit of getting one’s head round, but it is a fact. The next-door district to mine, Torridge district council, has the lowest GDP per head of any district in the entire United Kingdom. People come to Devon and Cornwall in the summer; the sun is shining and they think those counties are affluent. They are not. Devon and Cornwall are the two poorest counties in the country.
Now will somebody tell me why the people who earn the least in the country pay the highest council tax, get the least support from Government and get the thinnest and most hopeless level of public services back? It just is not right that public services in our area are so much thinner than they are in other areas. It is not right that there are so few social workers going out to deal with children. It is not right that there are so few buses. It is not right that I have had people moving into my constituency with disabled children who, about a year later, have said, “It is hopeless. It is impossible to bring up a disabled child in this county. We are moving back from where we came.” It has been going on for decades. It was hidden during the years when local government was getting bigger and services were growing, but it is all too horribly visible now, when everything is getting smaller. A number of us warned Ministers this spring, when they pushed their spending settlement through, that they needed to get back to the issue and sort it out before they came looking for our support again next year.
Mr Graham Stuart
I congratulate my hon. Friend on a passionate and well informed speech and on his becoming a chairman of the rural fair share campaign. Does he remember that beautiful summer of 2012, when the Government looked again at rural areas and decided that sparsity should get greater weighting, and then at the end of a year damped it all away and now propose to freeze that injustice, that inequity, all the way to 2020? It cannot be tolerated.
Sir Nick Harvey
I am grateful to my hon. Friend for his intervention. I do remember the Department taking the issue away and coming up with a partial solution. It was going to give greater weight to the sparsity factor. I thought that was a welcome sign. I would not have expected that to happen under a Labour Government, but I was delighted that when the Conservatives and the Liberal Democrats formed a Government together, the Department for Communities and Local Government finally had a look at the issue and came up with a workable solution.
What then happened is that the urban lobby beat a path to the Department’s door and said, “Up with this we will not put.” In its place came something called damping. In my experience, damping was meant to damp the effect of a change that was being made. It was, in a sense, a transitional relief so that the adjustment would be made in stages, but the difference that damping has made in these circumstances is that it has completely reversed the effect of what the Department had done and made it ever so slightly worse.
Time is running out. There are a couple of months left before we see the settlement for next year. I listened to my hon. Friend the Member for Tiverton and Honiton explaining the demand of the campaign—that by 2020 we want to have reduced the funding gap from 50% to 40%. Politics is a team game, so I am playing along with the team. I think that is horribly under-ambitious. The Government should sort the whole bleeding thing out straight away, but I am playing a team game.
To conclude, the poorest people are paying the highest council tax, getting the least support from Government and getting the thinnest service. It is not right. Do not ask me to vote for it again in the Division Lobby next spring.
Mr Graham Stuart (Beverley and Holderness) (Con)
It is a great pleasure to take part in this debate. I apologise for my late appearance.
I begin by congratulating my hon. Friend the Member for Tiverton and Honiton (Neil Parish), who secured it and, I know, led it off ably. I am delighted to follow my hon. Friend the Member for Bury St Edmunds (Mr Ruffley), although I should say to him that I have not ceased my duties as a chairman of the rural fair share campaign but have been joined by another co-chair, along with the hon. Member for Workington (Sir Tony Cunningham). It is a full, cross-party campaign recognising the inequity in funding.
My hon. Friend the Member for North Devon (Sir Nick Harvey) put his finger on the core point in his passionate speech. The lowest incomes are found in rural areas, so there is a social justice argument along with the data that we rightly focus on. That social justice argument is hard to rebut, and Ministers in successive Governments have hidden behind an obfuscation of numbers and data. As he said, the simple truth is that people on lower incomes are paying a higher level of tax to get a much thinner—I liked that phrase—level of services.
Daniel Kawczynski
My hon. Friend speaks about his group on rural services being all-party. I hope there are more Labour Members in his caucus than there are in the Chamber today.
Mr Stuart
My aim, along with my co-chairmen, is and always has been to try not to have a Labour-urban versus Tory/Lib Dem-rural battle—although that is difficult to avoid—but rather to say that we will get our arguments right. Perhaps that explains the modesty of our requests—too modest, perhaps—but our aim has always been to ensure that a fair-minded Labour Member of Parliament who does not represent a rural area would see the weight of the argument. Having come into politics, as we all do, to try to make a fairer and better society, people should see that we are not making a special, partial interest, but a case grounded in facts that will lead to a more just outcome.
Karl Turner (Kingston upon Hull East) (Lab)
Does the hon. Gentleman accept that deprivation levels in the city of Hull are higher than those in his constituency, and that per head of population Hull suffers four times as much as his constituency, which—if we are honest—is pretty well-off?
Mr Stuart
Average earnings in rural areas are lower, not higher. It is a myth; there is no rural idyll. In truth, the areas around Withernsea, Patrington and other villages contain people on similarly low incomes to those in the hon. Gentleman’s constituency in east Hull, but who spend a much higher percentage of their income on transport. They are suffering too, and local government funding starts from a much lower base. Is the population more or less resilient? In my constituency, the population in rural areas—in marked contrast to the hon. Gentleman’s constituency—is much older. There are vulnerable elderly people on low incomes who are remote and without access, and who have a council with massively less funding to deliver services.
In no way do I seek to suggest there are not serious social problems in east Hull, or that such problems could be of a different character to those faced by people in Beverley and Holderness. My hon. Friend the Member for North Devon thinks we were too modest in our request, but we are saying that the rural penalty of 50% more per head going to urban areas than goes to an older population with lower incomes in areas where services are more expensive to deliver is just not right.
I have always said that if someone showed me the evidence base that such a system is just, I would not, on behalf of my constituents, love it, but I would hear the case. However, no one, including Ministers in this Government and the previous one, has ever sought to do that because there is no justification for it. If we look at the cost of emptying the bins, supporting domiciliary care for the elderly population and so on, current differences between services that are comparatively well funded in Hull and less so in my patch cannot be justified. However, the point is to avoid a battle or denial of the genuine issues that the hon. Member for Kingston upon Hull East (Karl Turner) faces in his constituency, and to seek to move to a more needs-based system, grounded on people’s real lives, rather than an argument based on a high ideological point.
I have probably already spoken for half the time I am allowed, and I shall seek not to be like some hon. Members who ignore strictures from the Chair and carry on regardless. I know that the person in the Chair will not allow such a thing to happen. However, I make no apology for repeating that, on average, rural residents earn less than those in cities, and they pay council tax that is £70 or £80 higher per head—if we add up the people in each household who pay council tax, it is significantly more, yet urban areas receive Government grants that are 50% higher than those in the countryside.
Last year I led a delegation of rural MPs to meet the Prime Minister. We spoke to him and were delighted. There was no transformation, but perhaps hon. Members remember the summer—the beautiful summer of 2012 with the Olympics, good will; London Underground staff were nice. It was an astonishing and remarkable period. The capital was covered in magic dust. It was lovely. At that time, the Government suggested that they recognised rural sparsity. They did not go all the way we had hoped, but there was a movement in the right direction after years of it being skewed the other way.
Colleagues have said that it was damped away, but it was not damped away—it was stuck in a deep freeze. Damping is a transition mechanism. I would like the Minister to justify the fact that a transition mechanism has been used to shove an inequity that the Government recognise into the deep freeze.
Mr Stuart
As my hon. Friend says, they have shoved it into the deep freeze for seven years, to 2020. The Prime Minister and the Deputy Prime Minister have been led to believe that there is no fundamental injustice, which they repeat, but the Government recognise the injustice. Perhaps it was just the magic dust, but they saw the injustice last summer. By Christmas—poof!—it had gone. Remarkable! They damped it away, which is inexcusable and cannot be defended.
That is why I am delighted to see this brave and excellent Minister in the Chamber, a man who effortlessly survives a reshuffle, who grows in power and influence, and who works for an even wiser and more sagacious man than he—the Secretary of State. It is those two honest fighters for truth and decency in whom I put my trust, almost entirely. There is no need to nudge such fine people, but if a nudge were required, I can tell my hon. Friend that, as far as my office knows, 115 constituencies have parliamentary petitions calling for a 20% reduction in the rural penalty from 50% to 40%. Many colleagues have spoken today, but many who are not in the Chamber are strongly onside with that campaign. No nudges whatever are necessary to Ministers such as this one. However, I say to him that the patience, even of the most trusting and loyal people such as the hon. Members to whom I am referring, can know a limit. We do not want it tested. We want the Government to do what they said they would do last summer, when the magic dust reigned. Can we return to that?
The Minister smiles, and I trust in him to do the right thing. We cannot allow the freezing of that injustice and inequity until 2020. Having a slow unwinding of a situation that the Government have recognised is wrong will not undermine the move to business rates retention. I therefore hope he does not repeat the suggestion that it will.
I have one final request of the Minister before the end of my speech—I have not quite had my 10 minutes. Will he produce an analysis of the rural/urban funding split? The Rural Services Network, which we work with, has worked hard attending meeting after meeting. The Minister has been in meetings in which he has asked civil servants to produce such an analysis, but for some unknown reason it never quite comes out. I would like to ensure that, whatever the Government decide, we are at least technically on the same page and can agree on where the money goes, as in the percentage that goes here or there and the amount per head, using whatever classification he wants, as long as it is on a rural/urban split. So far, we have heard the Government say, “We don’t split it like that. We don’t recognise your figures.” We ask, “Are you saying that our numbers are not true?”, and the Government say, “We don’t split it like that,” which is nonsense. We now have such experienced and first-class Ministers in the Department that we can expect action. I want to ensure that we are on the same page technically, then we can have the political argument on the right thing to do. All hon. Members, whichever constituency we represent, whether it is Kingston upon Hull East or Beverley and Holderness, want a just settlement that ensures we have decent local services and that supports people, not least those with least.
Stephen Phillips
Indeed, and the Minister is well able to survive a reshuffle, as we now know. I could praise him more, and if it would get us what we want I would gladly do so. I have nothing new to say to him, because the figures are available. These are the poorest communities in the country and they get the roughest deal. On average they pay £75 more per head in council tax than anywhere else. The Minister has to deal with this. He has heard the strength of feeling on both sides of the House—this is a cross-party campaign, as he knows.
Patience is wearing thin. If the Minister comes to the House next year with a settlement that is fundamentally unfair for rural communities, such as those in North Kesteven district council and in a small part of South Kesteven, and if the funding settlement next year penalises rural communities again, which are already hit hard by the cost of fuel given the amount of travel that people in them have to do, he will not have an easy ride. I very much doubt that he will even find support. Today he needs to stand at the Dispatch Box and tell the House that the magic dust of the summer of 2012 has miraculously been found again and that the damping that has been used to rob Peter to pay Paul, when we were promised so much last year, will be addressed and not entrenched in the way the Government currently suggest for the next seven years.
Mr Walker
My hon. Friend is absolutely right; it is exactly the problem I was about to move on to. As I mentioned earlier, health funding is another area of major concern. Rural areas tend to have higher numbers of elderly people and a higher life expectancy than the major cities. As so much health funding is allocated according to life expectancy and targeted towards areas of high perceived deprivation, it means that the population of big cities is generally much better funded than that of rural areas.
With an ageing population and more people living with long-term conditions that require regular treatment, this creates enormous pressure on all rural health services, particularly on community health services. Worcestershire as a whole gets lower health funding per person than do more urban areas of the west midlands, but it has an older population, placing greater demands on our health service. Shifting the balance of health funding from mortality to morbidity would help to address this, as would having a more activity-based formula for community health. In health as in education, however, the local structures do not exist in isolation from local government. There are close links between the health and the social care systems, while pressures on both the acute and the community health systems create additional pressure on local authority-run social care. The fact that we are underfunded for health means that our underfunding for social care is a more serious challenge for our local authority.
Mr Graham Stuart
If there is an injustice that is greater than in education or local government, it is an injustice in health. Is my hon. Friend aware of the work of Professor Sheena Asthana, who looked at Mid Staffs and other hospitals with high mortality rates and saw a correlation between the hospitals with high mortality rates and the populations they serve, which are typically older, rural and funded on an inequitable basis?
Mr Walker
I am grateful to my hon. Friend for making that point, which clearly illustrates the problems we face.
I hope that I have shown that the problems of local government funding do not exist in isolation. The Government should strive to provide fairer funding, not just through the CLG budget but through health, education and no doubt many other budgets. We need to make sure that corrections and changes to formulae are delivered swiftly so as to correct the long-standing problems and not water them down so as to make those problems worse.
What else could we do to improve the situation? Our councils, whether they be city councils such as Worcester or great county councils, did not grow up as organs of central government. As my noble Friend Lord Heseltine pointed out in his “No stone unturned” review, the great cities of England were not grown through the diktat of Westminster or the spending of Whitehall. The councils that directed their growth and success raised their own funds locally, invested locally and built up services according to the demands of their own local constituents. We need to rebuild some of that independence and self-reliance. Although there was a great deal with which I disagreed in the speech of the hon. Member for Sheffield South East (Mr Betts), who chairs the Communities and Local Government Select Committee, this is one area on which I think we can agree.
This cannot be done overnight, and there would be significant risks in allowing some areas to raise taxes much higher than others, but it should be a stated aim of the Government to provide councils with more of their own resources over time and to give them greater opportunities to raise local funding. Such has been the growth in responsibilities of local government over the decades that there is little chance of it ever returning to being entirely self-funded, but there is a role for Westminster in re-allocating funding from the richest areas of the country to the more needy, including rural areas. Increasing the proportion of local government funding that is in the control of councils will give them greater flexibility to manage the challenges they face and to deliver localism.
Early policies of the coalition, such as the new homes bonus and the delegation of powers over business rates relief, showed some promise. As Lord Heseltine suggested, the creation of a challenge fund, or single funding pot, also offers some prospect of more locally driven projects. However, I fear that there is a conflict between the desire to empower local enterprise partnerships and enable them to bid for local funding, and the demands of our councils. I urge the Minister to give careful consideration to what has been said about the reallocation of money from planning authorities to LEPS under the new homes bonus scheme.
I believe that in the case of funding for local authorities, as in those of education and health, our Government can do more to ensure that money is allocated fairly. I commend and support the campaign of my hon. Friend the Member for Beverley and Holderness for a rural fair share, and I remind the Government that fairer funding for rural areas affects not just rural constituencies, but county towns such as the one that I am proud to represent.
Brandon Lewis
My hon. Friend makes a reasonable point. I will touch on how these things come together and the work we are doing to deal with that.
The hon. Member for North Devon (Sir Nick Harvey) made a passionate and strong speech about sparsity and disparity and how they need to be dealt with. My hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) made a powerful point about the chief executive of the Local Government Association, who is clearly disposed towards higher council tax charges for residents, which I think all of us—those of us on the Conservative Benches, at least—want to move away from while we keep frozen and low council tax. In some areas, good Conservative councils are even cutting council tax for their hard-working residents. I noted my hon. Friend’s comment about asset sales. I will look at that, and if he will bear with me I will get back to him on that specific issue.
My hon. Friend was absolutely right to mention incentives to pool and work together. We have put incentives in place and I will touch on them in a moment. Councils such as High Peak, Staffordshire Moorlands, Breckland and South Holland have just this week benefitted from those incentives and the money we announced.
My hon. Friend the Member for Beverley and Holderness continues to make a strong case on this issue. He has pushed it with other Members and comes to see me regularly. I have no doubt that our conversations will continue as we approach the financial settlement period over the next few months.
My hon. Friend the Member for Worcester (Mr Walker) and my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) highlighted the cost for rural areas, particularly with regard to transport. Members representing urban areas often mention issues to do with density and poverty and how they balance out. That issue has yet to be proven with regard to cost differences and we will continue to look at it.
I gently say to the hon. Member for Cambridge (Dr Huppert) that, if Cambridgeshire is so short of funding, he might want to ask how it could afford a huge pay-off and the rather interesting system it has used to reappoint the chief fire office of its fire authority. That happened in the past few weeks and it has raised a number of questions.
Mr Graham Stuart
Will the Minister touch specifically on the magic dust of 2012—the damping—and the fact that, instead of a being a transition mechanism, it turns out to be a deep freeze of an inequity?
Brandon Lewis
I am about to turn to some more general points and I will touch on the damping issue.
I want to be clear that behind all our thinking is that it is vital for councils to continue to play their part in tackling the budget deficit we inherited from the previous Government, making sensible savings and delivering value for money for the taxpayer, as many good councils are doing. We are providing direct financial incentives for councils to promote growth and jobs in their area. This year’s local government finance settlement set out how authorities can now directly retain £11 billion-worth of business rates and keep the growth from them instead of returning them to the Treasury.
More importantly, and perhaps more relevantly to this debate and the points made by hon. Members from all parties, in the current settlement we accepted, based on the available evidence, that rural areas are comparatively underfunded. We have therefore ensured that there is proper recognition of the additional costs of delivering services in rural areas. We adjusted the relative needs formula to reflect those costs. That was one of only three formula changes in the settlement.
Members have noted the changes, but I will reiterate them. We have increased the weight of super-sparse areas in the formula; doubled the sparsity weight for older people’s social care and district-level environmental protection and cultural services; reinstated the sparsity adjustment for the county level; and introduced a sparsity adjustment for fire and rescue. As a result, funding per head has been reduced by less in predominantly rural authorities than in predominantly urban authorities within all classes. There was a 4% reduction in the gap between 2012-13 and 2013-14. I know that some Members have an issue with how that is classified and I am happy to meet them to go through that when the figures for next year are confirmed.
We listened to the representations of rural authorities on the provisional settlement in the debate earlier this year. That is why we provided a further £8.5 million grant to help rural authorities with sparse populations.