Local Government Funding

Imran Hussain Excerpts

Wednesday 3rd February 2016 Westminster Hall

[Sir Edward Leigh]

Obviously that is the argument that those representing urban areas will make. I do not deny that the Minister has a delicate balancing act to make, but let right be done. Let there be justice. How can we have such an extraordinary discrepancy? People think of rural areas as fundamentally prosperous. I represent Gainsborough, a small industrial town, and the south-west ward of Gainsborough is one of the most deprived wards in the entire country under any measure.

[Imran Hussain (Bradford East) (Lab)]

Will the hon. Gentleman give way?

[Sir Edward Leigh]

No, I must finish now. Rural areas nowadays are not like some Gainsborough or Constable painting. There are real areas of deprivation, and we ask for justice. We know that it is not practical to have absolute parity per head across the country, but it is totally unacceptable that, in a time of tightening, we are not bearing the burden equally. Are we not one nation? The settlement is totally unfair to the rural taxpayer and our rural authorities. It must be revisited.

[Sue Hayman (Workington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies.

I will raise just a few of the significant concerns that Cumbria County Council has spoken to me about regarding the provisional local government finance settlement. I am sure that everyone is aware that Cumbria suffered very badly in the flooding before Christmas, but what people perhaps do not realise is that it is ongoing. Another bridge collapsed last week. Our problems are not over. The amount of money with which the Government propose to support us is so woefully inadequate that it will add to the difficulties we have with the settlement.

I will speak about rurality and the fact that we have a super-ageing population. Rural residents on the whole—certainly in west Cumbria—earn less than their urban counterparts, yet they pay more in council tax, get less in Government grants and receive poorer and fewer services, which often cost residents to access them because they might have to move. It is not a fair system.

[Imran Hussain]

Although I have some sympathy with the argument regarding the rural and urban comparison, surely this is not a matter of rural versus urban. This is a matter of some of the most deprived authorities, whether they are rural or urban, being hit the hardest. My district of Bradford will face up to £260 million of cuts by 2018. Does my hon. Friend agree that the most deprived authorities, regardless of whether they are rural or urban, are the worst hit, and that that will increase inequality and deprivation and decrease opportunities?

[Sue Hayman]

The fundamental point of argument, which I will come to, is about the way that funding is decided on need. That relates to what my hon. Friend says.

Cumbria has one of the fastest-growing populations of older people in the whole country, which will put extra pressure on the council in the future. This is about not just the funding formula now but the proposals for future years, and that is not taken into account.

The timing of the announcement and the consultation process is important, but it often gets glossed over. The announcement of the provisional settlement came very late in the year, more than three weeks after the autumn statement and the announcement of the spending review. Inevitably, that resulted in a short consultation period, which happened over Christmas. I understand that that was done to keep to the timetable for the announcement, but it is not helpful when councils are trying to manage their budgets and prepare for the future. There were significant changes, which should have meant a proper consultation, as Government guidance states that “12 weeks or more” is appropriate when significant changes are being made. The consultation fell well short of that. I urge the Minister to look at how we can improve consultations and their timings.

On the proposed approach to allocating the funding, I appreciate what my hon. Friend the Member for Leicester West (Liz Kendall) said, but the methodology does result in rural areas losing a significant amount of funding.

--- Later in debate ---

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Davies.

I congratulate my hon. Friend the Member for Leicester West (Liz Kendall) on securing this important debate and I start by paying tribute to Liverpool City Council, the councillors and, in particular, the elected Mayor of Liverpool, Joe Anderson, who have provided outstanding leadership over what has been a very difficult period—almost six years—since they took office.

Liverpool faces funding cuts from central Government of 58% and the first response of Joe Anderson’s administration has been to seek efficiency savings. Another response has been to find innovative solutions to problems. For example, the council is undertaking very significant community asset transfers to ensure that savings can be made and services protected.

Liverpool City Council is working with the other Merseyside councils and it has been determined to achieve serious devolution through the agreement that was reached for Liverpool city region devolution. It is not a council that is turning its back on efficiency, innovation or reform. Far from it—Liverpool wants to achieve all those things—but even with efficiencies and measures such as community asset transfers we are left with a massive gap, and it is a very similar story to the one that my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) has just told with regard to Birmingham.

[Imran Hussain]

Like Liverpool, many councils in that situation are looking, first, towards making efficiency savings and, secondly, towards innovative ideas. However, those things only go a certain way and then something must give. Most of those councils are now in that place where front-line services—libraries, cleaning services and all those important community services—are on the verge of closure. Once again, does my hon. Friend agree that this situation will have the biggest negative effect on those people who are already living in deprivation and poverty?

[Stephen Twigg]

I thank my hon. Friend, who has anticipated the next part of my speech, because his argument is exactly the one that I want to make, and that a number of our hon. Friends have already made. It is precisely the poorest areas of the country that are being hit hardest by the scale of the cuts in local government spending that we are witnessing. Efficiencies take us so far, and innovation can save money and sometimes improve services, but we are still left with a very wide gap.

My hon. Friend the Member for Leicester West spoke about the challenges in social care. Liverpool City Council, like other local councils, has been allowed to increase the council tax for the coming year to pay for social care. That will raise about £2.5 million, which is a fraction of the money that Liverpool will need to plug the gap in social care.

One of the biggest challenges facing us is how to ensure that those who most need support in social care are getting the support they deserve. As my hon. Friend the Member for Leicester West said, the saving in council money is not necessarily a saving in overall public spending, because a lot of those resources then have to be spent by the NHS in treating people who might otherwise be out receiving social care.

Therefore, when the Minister responds to the debate, my plea to him is to understand why it is that in some of the most deprived parts of the country, such as Liverpool, there is so much anger about the scale of the cuts that are being faced. Liverpool has said, and I believe is saying this genuinely, that it will struggle to meet its statutory responsibilities as a local authority if cuts on the scale being proposed go ahead. Liverpool has had a 58% cut in central Government funding since 2010, which is simply not sustainable. I urge the Minister—working, of course, within the constraints that his Department is operating under—to look again, especially at those authorities that are facing the largest scale of cuts.

I welcome the fact that my hon. Friend the Member for Leicester West has given us this opportunity today to air these important issues.