Local Government Funding

Heidi Alexander Excerpts

Monday 6th December 2010 Commons Chamber

[Heidi Alexander (Lewisham East) (Lab)]

This time last week, my constituency was the scene of violent protests about local government cuts. Town hall windows were smashed, four individuals were arrested and 15 police officers were injured as Lewisham council met to consider budget cuts of £16 million. Although the violence was due to a small minority intent on making trouble, there is no doubt that my constituents are angry, and they are right to be.

Lewisham bore the brunt of public outrage about local government cuts last week. Sadly, the £16 million worth of savings agreed by the council is probably just the tip of the iceberg. In the next four years Lewisham expects to have to save somewhere in the region of £77 million, just under a third of its total revenue budget.

[Joan Ruddock]

Did my hon. Friend hear the Secretary of State suggest that Lewisham council should look to its £60 million worth of reserves to deal with the issue? She knows, as I do and as he does, that of those reserves, the majority is for capital spending. The general fund is simply 2.5% of total budget. Does she agree that it would be utterly irresponsible to spend emergency reserves and do nothing to deal with cuts of up to £70 million?

[Heidi Alexander]

Indeed. My experience on Lewisham council was that the only occasion on which reserves would be considered for use was when that would be a fiscally responsible thing to do.

[Bill Esterson]

Will my hon. Friend give way?

[Heidi Alexander]

I should like to make progress as I am conscious of the time.

The demonstrations at Lewisham council last week did not take place because that is a Labour council intent upon slashing services or haemorrhaging staff. The demonstrations at Lewisham last week were a direct result of a Tory-Liberal Government determined to cripple councils the length and breadth of the country. I first learned about the riots last Monday when I was on my way home from Westminster. As I sat on the train, I could not help but reflect upon how unfair it was that former colleagues of mine were being blamed for the Government’s decision to inflict cuts that go well beyond anything that is sensible or necessary, and well beyond anything that my party would have done, had we been in power.

As I sat on the train, I also realised that at the exact time that council employees in Lewisham were trying to hold back an angry mob, hon. Members in this Chamber were debating reform of the banking system. For me, the two are not separate issues. Local democracy is rightly accountable for the decisions that it takes, but surely we have to ask: where are the protests outside the plush offices of the bankers whose excessive risk taking plunged us all into this crisis in the first place? For that matter, where are the protests outside the office of the Secretary of State, whose failure to stand up for his Department has forced Lewisham council into its present position?

I am not for one minute suggesting that the violent protests in Lewisham should be replicated anywhere, but surely those responsible for the current financial state of local government should be made aware of the effects that their actions are having on communities throughout the country.

There’s the rub: for me, the Government do not get it. They do not seem to get the fact that by heaping cuts on local authorities, they run the risk of putting thousands upon thousands of people out of work. Ministers do not seem to understand that draconian cuts to local government will simply take work away from private firms—the very firms that they are desperately trying to grow. Nor do Ministers seem to understand that the scale of the cuts could decimate voluntary and community organisations at the precise moment when they want them to do more. Most worryingly for me, there seems to be no acknowledgement that the size and speed of the cuts could force councils to dismantle the services on which the most vulnerable members of our society depend.

[Graham Jones]

Will my hon. Friend give way?

[Heidi Alexander]

I would very much like to make some progress, and I am conscious that there is a time limit.

My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) spoke earlier about elderly care, on which I, too, would like to focus for a few minutes. I have been reprimanded by the Secretary of State in this Chamber before for daring to suggest that the supposedly extra money for adult social care announced in the comprehensive spending review would be wiped out by the cuts to local government. Well, let me tell the Minister today that there are many authorities that share my concern. In fact, a recent report by London Councils estimates that even with the “extra” £2 billion announced in the CSR, funding for adult social care will fall by £1.8 billion over the next four years. During my time as a councillor, the worst meetings that I had to attend were those at which we considered changing the eligibility criteria for care packages—the threshold of need that the elderly and those living with disabilities have to meet to get support. In the end, we did not raise the threshold in Lewisham, and I am pleased that we did not do so. It came down to a question of human dignity, and I was proud to be part of a Labour council that recognised that.

However, with the current scale of cuts facing local government and the demand for care increasing by the day, I cannot see how much longer councils will be able to maintain the level of support that they currently provide. If they do maintain current levels of care, other council services will have to take a big hit. They include libraries, leisure centres, recycling facilities and street sweeping—many of the things that people take for granted. Does the Minister realise that those are the sorts of impossible decisions that he is asking council leaders to take?

I accept that in many areas there may be ways of doing things differently—doing things more cheaply and doing them better—and that is precisely what good, forward-thinking councils have been doing over the past few years. My concern about the Government’s approach to local government is that it seems to be based on a mistaken belief that councils are characterised by rampant profligacy, sky-high salaries, and hundreds and hundreds of non-jobs. Nothing could be further from the truth. My experience tells me that, year after year, many councils have been working hard to make themselves more efficient, the result being that there is now simply not much fat left to trim. The way in which cuts are being disproportionately squeezed into next year—although we hope we might get some good news on that—will also make it harder for councils to take the sensible, long-term strategic decisions that are needed.

My concern about the scale of the cuts to local government is that it will limit the ability of councils to address some of the big issues of our time, and restrict the innovative work that some modern, progressive councils are already undertaking. Let us take climate change. Although new forms of electricity generation and more energy-efficient homes may help to reduce our carbon emissions, some of the really big differences will come about only by people changing their behaviour. That does not happen by magic, and although Ministers might be concerned that this smacks of the nanny state, I cannot help but think that it is local government that is best placed to assist communities in reducing their carbon footprints. However, that type of work is resource-intensive, and with resources so much scarcer, councils will have to stop doing other things if they want to continue such work.

In conclusion, I believe that the scale and speed of cuts to local government is part of a deliberate strategy by Ministers to shift the really difficult decisions on to someone else. It is an attempt to deflect attention away from themselves and on to council leaders up and down the country. To give Ministers their due, as a political strategy you cannot knock it, Mr Deputy Speaker, but as a strategy to reduce the country’s deficit fairly and sensibly, it is nothing short of a disgrace.

[Several hon. Members]

rose—