Local Government Funding: North-East

Debate between Iain Wright and Alex Cunningham

Tuesday 1st March 2016 Westminster Hall

[Mr Wright]

My hon. Friend is absolutely right about services having been stripped to the bone: there is nothing left to cut. Local authorities can really only consider what they can manage to do and the minimum amount required of them in respect of statutory services.

Along with other local authorities, Hartlepool had a tough deal in the last Parliament, but it is going to get tougher in this one. Hartlepool Borough Council was established when unitary authority status was granted 20 years ago. The coming financial year is set to be the most difficult that the borough has ever faced, with a budget that is £8.274 million less than last year, representing a year-on-year reduction of 19.6%. That reflects the combined impact of a further £4.474 million cut in Government revenue support grant, which is a year-on-year reduction of 19.7%, and the permanent reduction in the rateable value of the nuclear power station—the Minister has heard me discuss this before—which reduces business rates income by £3.8 million year on year, in perpetuity, equating to a reduction of 19.4%. Over the lifetime of this Parliament, to the year 2019-20, Hartlepool faces a combined settlement funding assessment cut of 27%. Every single local authority in the north-east will experience cuts, from 35% in Northumberland to 25% in Sunderland. By the end of this Parliament, Hartlepool, and local authorities in the north-east in general, will have experienced nine consecutive years of funding cuts. That is unprecedented.

My hon. Friend the Member for Darlington mentioned further pressures on health and education, where we have challenges in our region. Will the Minister comment on public health funding budgets, to which further cuts will be made over the next four years? Additional cuts will be phased in at 2% in 2016-17, 2.5% in 2017-18, and 2.6% in 2018-19 and 2019-20. On top of that, from 2017-18 the Government will cut £600 million from the national education services grant, which equates to a cut of 74% over the lifetime of this Parliament. That will have enormous effects on how local authorities can help education provision in the north-east.

From 2017-18, the national schools funding formula will also affect the council’s revenue budget—perhaps not directly, but it will have a negative impact on Hartlepool’s schools and reduce the public funding available in my borough. That will mean that the local authority will have to step up to the plate and try to provide further help, which it cannot provide because it does not have the available resources.

[Alex Cunningham]

When I head towards my flat in the evening, I see all this tremendous building in London. One of these blocks of flats is 50 storeys high and is probably generating millions of pounds in additional council tax—certainly hundreds of thousands. We would have to build on almost every single square foot of land in Stockton to generate that sort of income, which is a further illustration of how the south has it good in being able to generate cash but we do not.

[Mr Wright]

My hon. Friend and constituency neighbour makes an important point about something that I was going to come to. The 100% retention of business rates does not help the north-east and will not help the finances of local authorities in the region. Whereas Westminster City Council, for example, could pave its streets with gold, we in the north-east will suffer enormously as a result of the 100% retention of business rates.

The switching off of the nuclear power station in my constituency for reasons of health and safety, which was quite right, means that my local authority is incredibly vulnerable to the loss of business rates. Given the make-up and structure of the north-east economy, large manufacturing businesses could end up putting local authority finance under further pressure as a result of the lack of help. Nowhere has that been exemplified more than in the closure of the SSI steelworks in Redcar.

Further Education Colleges (North-east)

Debate between Iain Wright and Alex Cunningham

Tuesday 26th January 2016 Westminster Hall

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. I thank my hon. Friend the Member for Bishop Auckland (Helen Goodman) for securing the debate.

Further education colleges in the north-east are important engines of economic growth and prosperity in our local communities, as well as significant drivers of social mobility. By 2022 the Tees valley will require 127,000 jobs in key sectors, but only 278,300 people out of a working-age population of 417,000 are in employment. The skills mismatch is incredibly important, and FE colleges can fill the gap.

Hartlepool, for a relatively small town, has a remarkably diverse range of post-16 provision. We have a sixth-form college, Cleveland College of Art and Design, and two schools with a sixth form. Hartlepool College of Further Education is the biggest provider of apprenticeships in the Tees valley and the second biggest provider in the north-east for 16-to-18 apprenticeships. It has a fully functioning aircraft hangar, with two jets and a helicopter, and we have real skills, expertise and quality in STEM. The college’s apprenticeship success rate was 86.4%, when the national rate was 70.3%.

As my hon. Friends have indicated, there are concerns that the Government’s reforms are pushing FE colleges to adopt significant changes in their business models, which will put their viability at risk.

[Alex Cunningham (Stockton North) (Lab)]

I am grateful to my hon. Friend and neighbour for giving way. Yesterday in Education questions the Minister dismissed my concerns about the cost of area reviews, which I am led to believe could result in millions of pounds of extra banking fees being incurred as loan agreements are ended and new ones created. Does my hon. Friend agree that any real financial benefit to colleges might be lost unless the Government step in and decide what will happen with those additional costs?

[Mr Wright]

My hon. Friend makes a fair point, but I would go further, because I worry about the area-based review in the Tees valley. May I ask the Minister why the review includes FE and sixth-form colleges, but not school sixth forms, 16-to-19 free schools or university technical colleges? If a comprehensive review of post-16 provision in an area is being undertaken, why include only certain providers? The 10 FE colleges in the Tees valley subject to the review account for only about 60% of provision, so how can a proper evaluation take place? The process seems opaque, and no one has been able to demonstrate to me clear and transparent criteria for how the area-based review is being conducted. Will he use this opportunity to do so this afternoon?

Furthermore, given that colleges are autonomous organisations, it is difficult to see how any conclusions of the review can be implemented unless the Government starve colleges of funding until they agree to the conclusions. Will the Minister respond to that point and confirm that colleges in the north-east that refuse to accept the findings will not experience disproportionately harsh cuts to their funding?

The Government’s key objective in skills policy is the target of 3 million apprenticeships by 2020. The apprenticeship levy has been proposed as a means to ensure that firms pay for training. I appreciate that core funding for 16 to 19-year-olds and adult skills will be maintained in cash, if not real, terms as a result of the spending review. However, the Minister knows that there remains acute pressure on college budgets. The Skills Funding Agency has suggested that about 70 colleges throughout the country could be deemed financially inadequate by the end of 2015-16.

A devastating impact on FE colleges in the north-east is possible. Will the Minister reassure the House, without referring to specific institutions—doing so might undermine confidence—that colleges in the region will have suitable resources? Will he explain how he anticipates that the combination of his main priority, apprenticeship expansion, with other FE college activities will complement one another, rather than the former being seen as a substitute or alternative for the latter?

I mentioned that FE colleges in the north-east are drivers of social mobility. For people in the north-east in their 20, 30s or 40s who have been made redundant—sorrowfully, we have had far too much of that in the north-east recently—or who may not have worked hard at school but now want to put their lives back on track, and yet are not in a position to take on an apprenticeship place, how does the Minister anticipate that FE colleges will be able to provide them with the necessary basic skills to make something of their lives?

I turn to the apprenticeship levy and, in particular, something that the Minister said when giving evidence to the Sub-Committee on Education, Skills and the Economy yesterday. About 2% of firms in England will be liable for the levy, and the Tees valley figure is broadly comparable to the national proportion—2.2% of our employers are large firms. In Committee I asked the Minister whether the Government position was that the levy will be a ring-fenced fund to be drawn on only by levy payers to fund apprentice training. The Minister said that large firms would have “first dibs” on the money raised from the levy.

That response prompts a number of questions. If that is the case, how will the 98% of smaller firms receive funding for apprenticeship training through the levy if they are waiting for scraps from the table? Will firms be able to carry the levy forward to subsequent financial years, so that if a large firm does not want to draw on it in year one, it will have that possibility in year two? Again, how will that help smaller firms? How will the system help FE colleges provide suitable financial planning? Will the “first dibs” approach be allocated on a national, regional or sub-regional basis—will it be large firms only in the Tees valley, or only in Hartlepool? How will the levy work?

As the Minister understands, the considerable uncertainty is undermining the ability of colleges in the north-east to plan and to provide their existing excellent further education provision. I hope that further detail will be provided this afternoon, so that colleges can get on with the job of ensuring that we can transform our regional economy and that people’s lives in the north-east are made better.

Unemployment (North-east)

Debate between Iain Wright and Alex Cunningham

Wednesday 20th June 2012 Westminster Hall

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Brooke, and I hope that your foot is feeling a lot better. May I also take this opportunity to thank Mr Speaker for allowing me to secure this debate? I have been trying to secure a debate on unemployment in the north-east for some time, because it is the most important and pressing social, political and economic issue facing my constituency and the wider region. I would therefore be grateful, Mrs Brooke, if you passed on my sincere thanks to Mr Speaker.

I welcome the Whip, who will be responding to the debate. I do not doubt the integrity and commitment of the hon. Member for Preseli Pembrokeshire (Stephen Crabb) in any way, shape or form, but it is deeply contemptuous to the people of the north-east for the Department for Work and Pensions not to have deigned to provide a Minister to respond to my concerns and those of my hon. Friends.

The Whip may expect me to unleash a torrent of negativity and pessimism about the situation—notwithstanding what I have just said—and to come with a begging bowl, asking for help and handouts on behalf of a declining and failed region. That is far from the case, because the north-east is far from being a failed region. It is true that we have struggled to adapt to the changing economic and industrial fortunes of the past 30 years or so, particularly in finding a new economic role following the closure of many heavy industries. I have to say that that task was not helped by the Administrations of the 1980s. Indeed, it was made much worse by the decisions they made and the priorities they set.

However, the north-east, the region that was the centrepiece of the workshop of the world in the 19th century, has the capacity, capability and ambition to become one of the major contributors to a modern global economy, and we have the work force to match. If the Government are serious—I hope that they are—about rebalancing the economy in terms of sectors and geography to make us less reliant on a few sectors and on London and the south-east, they have to see the north-east as a growth area and make us a priority.

There are sectors that have the scope to take advantage of Britain’s current competitive advantage and lead the world in the next few years—advanced manufacturing, chemicals, pharmaceuticals, automotives, higher education, renewables and the low-carbon economy, energy and tech companies. If we also think about the firms in the supply chain that will assist those industries, particularly such vital industries as the steel industry and the construction industry, the north-east must have a key role to play.

[Alex Cunningham (Stockton North) (Lab)]

My constituency enjoys some of the best industrial riverside frontage in the country. It was once home to a thriving shipbuilding industry, and then North sea-related activity. There is now the potential for real jobs and growth in the green industries, building monopiles and other components for wind farms. Does my hon. Friend agree that it is time for the Government to clarify their position on support for wind farms, and encourage developers of wind farms to buy their gear in the north-east, rather than from somewhere in Europe?

[Mr Wright]

My hon. Friend is absolutely right. Just further up the coast in Hartlepool, we have a thriving renewable energy industry with great firms, such as JDR Cable Systems and Heerema Hartlepool, which can supply a lot of offshore wind turbine components. However, investors are crying out for certainty from the Government. They need policy certainty to allow them to invest for the long term. The Government are failing spectacularly on that.

--- Later in debate ---

[Mr Wright]

I am grateful to my hon. Friend for highlighting that point. I had noticed that the hon. Members for Stockton South (James Wharton) and for Hexham (Guy Opperman) have not bothered to turn up for the debate, which shows the importance that they attach to economic enterprise, growth, jobs and unemployment.

[Alex Cunningham]

My hon. Friend is one neighbour, but if my Conservative neighbour, the hon. Member for Stockton South, was in his place today, he would point to our enterprise zone and our local enterprise partnership, which have been introduced by the Government. Yet despite their best efforts, unemployment in my constituency is nearly 4,200, up 400 on last year. Does my hon. Friend not lament, as I do, the loss of real investment that we had in the days of One North East?

[Mr Wright]

I should declare an interest: One North East used to employ me—that is one of the reasons why the Government wanted to get rid of the regional development agencies. I absolutely agree that a compelling economic vision helped by an RDA that can set strategic priorities is vital. My hon. Friend mentions the hon. Member for Stockton South who is, as far as I am aware, although I might be corrected, one of the only people in north-east and Cumbria not to have come out against the ludicrous proposal on regional pay, which is what I want to turn to.

The House is considering regional pay this afternoon. At a time of depressed demand, eroding confidence and rising unemployment, it seems economically ludicrous for the Government even to contemplate such a policy. The TUC rightly estimates that regional pay could take £500 million from the north-east’s economy precisely when we want consumer confidence to increase to allow people to start buying things and creating jobs. Does the Whip think that taking £500 million from the north-east will increase the number of businesses and employment?

Instead of continuing with failed economic policies that are increasing unemployment in the north-east, the Government should listen to regional businesses, which are asking for a cut in national insurance contributions to incentivise them to take on extra workers. The Government should consider a temporary cut in VAT to allow confidence to emerge. They should use the power of the Government’s buying position to use procurement to invest in the regional supply chain, to increase the number of apprenticeships and to give a chance to local firms. They should reintroduce the future jobs fund, which helped many hundreds of young people in Hartlepool and throughout the north-east during the worst times of the global financial crisis. Most of all, the Government should be pursuing an active industrial strategy, working with productive businesses to embrace the competitive sectors of the future. They have done that to some extent with Nissan and the automotive industry, by carrying out what the previous Labour Government were doing, but they should step up a gear with the low-carbon economy—as my hon. Friend the Member for Blyth Valley said—chemicals and advanced manufacturing.

If the north-east is given the tools by the Government, it will deliver for its people, its communities, its businesses and the rest of the country. I ask the Whip to help us to unlock the huge potential and end the human, economic and social waste of unemployment in the north-east.

Youth Unemployment

Debate between Iain Wright and Alex Cunningham

Wednesday 9th November 2011 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

Youth unemployment is the single biggest social and economic problem facing my constituency, and its effects will leave a scar on Hartlepool’s prospects for decades to come. My town has the dubious and unwanted distinction of having the worst youth unemployment in the country: 1,450 young people in Hartlepool—17.4%, or nearly one in five— do not have a job. We have not seen such levels of youth unemployment in my town since 1995. What is particularly worrying is that in my constituency unemployment is rising fastest among young people, and rising much faster than the regional or national average. Since this Government came to office 18 months ago, youth unemployment in Hartlepool has increased by some 60%, and it has been increasing fastest in the past six months.

[Alex Cunningham (Stockton North) (Lab)]

I am grateful to my fellow Teesside MP for giving way. Does he remember when Middlesbrough football fans used to chant, “There’s only one job on Teesside”, in celebration of Joseph-Désiré Job, who played for the club? That is no longer very funny, because young people might be under the impression that it is actually true as hundreds of them chase every single job opportunity on Teesside.

North Tees and Hartlepool NHS Foundation Trust

Debate between Iain Wright and Alex Cunningham

Monday 5th July 2010 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

I congratulate my hon. Friend on securing this debate, which is very important to a large number of hon. Members. Will he confirm that the whole driver for this reconfiguration has been a clinically led approach—led by eminent doctors and surgeons—and that the decision made by the Chief Secretary takes us back to square one, with no plan B?

[Alex Cunningham]

I certainly agree with that. I know that it is the view of clinicians and other health professionals that it will be impossible to sustain two hospitals with the full range of services and facilities needed to serve our communities. Indeed, patients in our areas have to access different services at the two different sites, which are 14 miles apart.

The new hospital was to be a vital element of wider health care reform in our region and would have delivered clinically sustainable hospital services in the single hospital while delivering a much wider range of services in the community much closer to people’s homes, including three new integrated care centres in Billingham, Hartlepool and Stockton. There is no doubt that there has been some controversy about the plan to build one “super hospital” to replace the two outdated ones, as well as unease among some in the community about the location chosen. I firmly believe, however, that the plan would have provided improved services for local people and that it is ultimately the right plan for the NHS trust to pursue.