Oral Answers to Questions
Debate between Hazel Blears and Robert Neill
Hazel Blears (Salford and Eccles) (Lab)
I believe that the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), the Minister with responsibility for fire and rescue services, is an eminently reasonable man. In the Adjournment debate last week, he will have heard the strength of feeling expressed on behalf of metropolitan fire and rescue authorities. The grant for Greater Manchester has been cut by 12.5%, whereas the grant for Cheshire has increased by 2%, when Greater Manchester has more fires, more deprivation and more poverty. I believe that settlement to be grossly unfair. Will the Minister, as a reasonable man, change the settlement for years three and four to protect people in metropolitan areas?
Robert Neill
It is impossible for me to approach the right hon. Lady other than in a spirit of reason. I gently point out to her that the funding results come from the application of a formula that essentially we inherited from the previous Government. It assigns significantly more money to metropolitan fire and rescue authorities than to those in the counties, and we have adjusted it to give greater weight to density, which advantages urban areas. We are looking to make further reforms when we bring in business rate retention, which will fund all fire authorities.
Local Government Funding
Debate between Hazel Blears and Robert Neill
Robert Neill
I shall do my best, despite the noise.
What we have seen today is an exhibition of wriggling by the Opposition. They have failed to take on board serious concerns raised by hon. Members. Reference was made to my hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes)—[Interruption.] I was actually looking at you, Mr Speaker; I think that is courteous too. Reference was also made to my hon. Friend the Member for Bradford East (Mr Ward). Hon. Members have made serious points. The need for deficit reduction does not brook significant delay, but fair points have been made about it being appropriate to look not just at formula grant but at other spending powers available to local authorities. My right hon. Friend the Secretary of State has indicated that we are continuing to do that. We have taken steps to roll more grant into the formula grant, so the arguments that were made on that issue do not sensibly contrast like with like.
We have sought to give more flexibility in these undoubtedly difficult times by ending the ring-fencing of all revenue grants from 2011-12—something that the Labour Government never got around to doing. We are including single, non-ring-fenced, early-intervention grant worth about £2 billion. We are significantly simplifying and streamlining grant funding by rolling about £4 billion of grants in 2010-11 into the unhypothecated formula grant and reducing the total number of grants from 90 to 10. All those measures are designed to bring much greater transparency, as hon. Members on the Government side have pointed out. Despite their 13 years in office, the previous Government neglected to do that, so we need not take lessons from them on fairness or transparency.
As the Secretary of State has indicated, we are continuing the system of floor protection, which will help the most vulnerable authorities. That degree of ring-fencing, plus the other, greater freedoms that will be given in the decentralisation Bill that will be introduced shortly, will significantly assist local authorities in directing their resources to the most vulnerable. The fact that resources are limited is entirely the responsibility of Opposition Members rather than Government Members and the Opposition should never seek to wriggle out of that.
Let me congratulate one or two hon. Members in particular. My hon. Friend the Member for Meon Valley (George Hollingbery) made a particularly thoughtful and considered speech. He talked about the inevitability of floors and ceilings in the current system and the fact that there are real concerns in shire areas as well as urban areas. Any Government have to carry out a balancing act and that is what we seek to do. He and other hon. Members rightly referred to the need to move away from a formula that is past its sell-by date. Unlike our predecessors, this Government have grasped that nettle and committed to a swift review of local government resource in the first six months of next year.
My hon. Friend the Member for Bermondsey and Old Southwark made fair points on behalf of London councils and the Local Government Association. The Secretary of State has met LGA representatives, and let me tell the hon. Member for Stockton North (Alex Cunningham) that I am happy to meet his fire authority; I have met a number of others already. We are protecting fire services, which are getting a lesser degree of reduction, and the profile is different, so steps are being taken in that regard. I will happily meet any authority that seeks to discuss these issues with me.
My hon. Friend the Member for Halesowen and Rowley Regis (James Morris) made an exceedingly well informed and powerful speech. He talked about the need, at times such as these, to move to greater transparency. It was pretty telling that certain Opposition Members rather jeered at the mention of the £500 in relation to transparency. That shows a patronising attitude towards putting ordinary people in the driving seat. Perhaps that is the difference between the Government and the Opposition on this issue.
My hon. Friend the Member for Croydon Central (Gavin Barwell) carried out a comprehensive demolition job on the speech by the shadow Secretary of State, the right hon. Member for Don Valley (Caroline Flint), and the entire proposition behind the Opposition’s motion. The previous Government were going to cut, and they would have cut as deeply. They were going to eliminate the deficit; the argument was over timing. The state that we discovered when we came into government meant that swift measures were necessary. To pretend otherwise is to behave like the people who set fire to the house and then blame the fire brigade when it comes in to put the fire out. The intellectual bankruptcy of the Opposition is shown by the approach that they have adopted to these matters.
I say to the hon. Member for Mitcham and Morden (Siobhain McDonagh)—whom I have known in London government for a long time—yes, I accept that there are councils of all political complexions trying hard in difficult times. My own council is doing so, as is hers. Equally, she will understand that, despite the sympathy that we have for those difficulties, as anyone in the business world will tell her, it is often best and most sensible to take steps towards restructuring at an early stage. That is particularly appropriate in the case of local authorities with a full range of functions. There are good examples not only in London, but across the country of local authorities making real structural and operational change. That needs to be done quickly.
I appreciate the point made by a number of hon. Members about capitalisation. I understand what is said, but it should be remembered that we are making £200 million available for non-equal pay capitalisation. Capitalisation is an exception to the normal accounting processes. Because capitalisation is permission to borrow, that ultimately has impacts upon revenue spend because it has to be paid back. It must therefore be strictly controlled. Although I understand that councils will inevitably say they want more, Government must be realistic and set limits to an exception to the normal process.
That we are not being dogmatic is reflected in the fact that we have adopted a different profile in relation to fire authorities, because experience shows that it takes single-purpose authorities longer to reconfigure their working arrangements than those that have a range of purposes which can be more effectively shared. We have been sensible and proportionate in our approach.
The Secretary of State stressed—I hope Members from all sides will take this on board, as there seemed to be a degree of consensus on the matter—that it is important that local authorities do not resort to the old-fashioned way of salami slicing and, in particular, cutting grant to the voluntary sector. That is usually important. We will fail if local authorities go back to the tried old ways of doing things. We want to encourage them to do otherwise.
That is why, in the localism Bill, we will establish new rights for voluntary and community groups to deliver local services. That is why the Government have created a transition fund of £100 million to be spent in 2010-11. It will support the voluntary and community sector during the first year of the spending round. Through the localism Bill we will also give voluntary and community groups the right to challenge local authorities where they believe that they can run services differently or better. There is a raft of measures to support the voluntary sector, none of which was adopted by the previous Government in their 13 years in office—another example to demonstrate why we need take no lessons.
Hazel Blears
I thank the right hon. Gentleman. Does he acknowledge that the gap in voluntary sector funding is likely to be in the region of £3 billion as a result of local government cuts, and his £100 million transitional fund is a drop in the ocean?