Local Government Finance (Rural Authorities)

Helen Goodman Excerpts

Monday 11th February 2013 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

I congratulate the hon. Member for Tiverton and Honiton (Neil Parish) on introducing this debate and the hon. Member for Beverley and Holderness (Mr Stuart) on the good work that he has been doing in running the all-party group on rural services.

I want to make it absolutely clear that this is not just an issue for Government Members; Labour Members are also concerned about it.

[Sir Tony Cunningham]

I am sure that my hon. Friend agrees that this is not a party political issue. Cumbria county council is controlled by Labour and Conservative councillors, and they think that the situation is unfair.

[Helen Goodman]

Precisely—it is unfair. There is a lot of deprivation in rural areas, many of which in my constituency are former mining areas and old mining villages where the levels of deprivation are among the highest in the country. That is also true of Cumbria and in Derbyshire.

It is important to consider why service delivery is more expensive in the countryside. Distance issues that do not apply in urban areas mean that the costs of delivering village schools, school transport, health services, social care, transport to hospitals and ambulance services all shoot up.

[Andrew Bingham (High Peak) (Con)]

In a two-tier authority, all the things the hon. Lady mentioned that cost more because of rurality would relate to a county council. Does she agree that there are also extra costs to rurality at the district level?

[Helen Goodman]

The hon. Gentleman is right. On roads, for example, in my constituency there is not only the cost of their upkeep but of dealing with the snow, and the bus network covers 900 sq km. He will immediately see that huge costs are falling on Durham county council.

We need to have more community centres and village halls—extra facilities to deal with the fact that people cannot be expected to travel all the time to reach their public services. Last month I had a particularly poignant example involving a training centre in a village that is needed because the bus fares are so high to get to the further education college in the main town. Unfortunately, because of the cuts in the local government settlement, Coundon and Leeholme community partnership found that the training centre was going to have to close. That is a terrible problem for the people in the village, who will not be able to afford the training that they need.

School transport is also a significant problem. It is absurd for children to be walking 3 miles to and from school every day, as is possible under the law at the moment. Such laws were instituted in the days when there was not a lot of traffic on the roads as there is now. We really need to pay attention to these special rural issues.

I want to say a couple of things about the system. The summer consultation showed that rural areas were gaining more than £30 million, but those gains were lost because of damping, as the hon. Member for Tiverton and Honiton said. A one-off grant of £8.5 million has been provided to some authorities for 2013-14, but there is apparently no plan to continue with the grant beyond that period. It would be helpful if the Minister could tell us his plans for future years, because rural areas have lost proportionately more than urban areas. I want to raise with him a specific point about Durham.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)]

Will the hon. Lady provide the House with the information that she suggests exists? The truth, as I am sure she will agree, is that as a result of the adjustment the reduction in spending for predominantly rural areas is less than the reduction in spending for other forms of authority.

[Helen Goodman]

Given that Durham county council faces a 40% cut over the spending period, I could not possibly agree with the right hon. Gentleman’s contention.

At the start of last week, the Government announced an extra £8.5 million for rural areas. A list was published on Monday by the Department for Communities and Local Government indicating that County Durham would benefit by £224,000. Later in the week a further, revised list was published in which Durham’s £224,000 had disappeared. The allocations for other areas had also been taken from the list. What is happening to Durham? Why were we on the list in the first place? Why are we not on the list now? What has the Minister done, not just with our county, but with others that have been moved off the list?

It is clear that rural fire authorities have suffered a larger fall in their grant than urban ones, even when their share of the £8.5 million is included. Rural council taxes are an average of £75 a head more than urban council taxes. That is because of the extra costs of delivering services in rural areas, not because rural authorities are less efficient. The result is that rural authorities will be at least £60 million worse off than they might reasonably have expected to be next year.

--- Later in debate ---

[Chris Williamson]

The complexity of local government funding is certainly an issue, but when the hon. Gentleman refers to an historic problem, I remind him that in every year of the Labour Government, local government saw growth in its budgets. Only since the election of the Conservative-Liberal coalition have we seen a huge reduction in funding for local government. Of course we must argue for a fair share for rural authorities, but that should not be achieved at the expense of urban authorities.

[Helen Goodman]

Does my hon. Friend agree with the contention that the freeze only really helps authorities in the south-east with high house prices? Is he aware that of the 17 authorities with projected increases in spending power for 2014-15—the year after the £8.5 million one-off grant—no fewer than 14 are in the London commuter belt, while rural areas feature heavily among those facing the biggest reductions?

[Chris Williamson]

My hon. Friend draws attention to a real problem with the council tax freeze grant, as have Government Members this evening. Local authorities of every political persuasion have seen through the Secretary of State’s wheeze. For many local authorities, taking the grant would clearly create significant problems down the road. That is why we are seeing Conservative, Liberal Democrat and Labour authorities refusing to take the grant, for very good reasons.

We have heard contributions this evening from my hon. Friend the Member for Bishop Auckland (Helen Goodman), who we have just heard from again, and the hon. Member for Beverley and Holderness (Mr Stuart), who spoke passionately about the need for a fairer settlement—although, rather paradoxically, he also said he supported the Government’s austerity programme. It seems to me that he cannot have it both ways.