Local Government Finance

Jim Cunningham Excerpts

Tuesday 5th February 2019 Commons Chamber

[James Brokenshire]

I must make some progress.

I know that local authorities were also pleased to hear that we plan to distribute £180 million of surplus in the business rates retention levy account in 2018-19, which was generated by strong growth in business rates income, to every authority in England, based on need. But as well as more control, councils want and need to see a clearer link between the allocation of resources and local circumstances.

[Mr Jim Cunningham (Coventry South) (Lab)]

On a point of order, Madam Deputy Speaker. I have tried two or three times to draw the Secretary of State’s attention to serious cuts in Coventry, and the people of Coventry want to know what the benefits are in relation to the £1 billion that he just announced—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. The Secretary of State has the right to take as many or as few interventions as he wishes. He is aware that there is pressure on time. I am not sure whether the hon. Gentleman has put in to speak, but he really does have to wait until the Secretary of State wants to give way. I do not like points of order getting in the way of speeches, because I do not think it is fair on others who are waiting to speak.

--- Later in debate ---

[Andrew Gwynne]

My hon. Friend is absolutely right. The fact is that councils are the lynchpin of the provision of proper, cohesive, joined-up services with other agencies, whether housing associations, the police, leisure services or youth services. It is crucial that our councils and councillors are given the resources they need so that we do not cost-shunt from one area of the public sector on to the others. It is self-defeating to cut youth services, early intervention and police budgets at the same time, because we end up in the situation my hon. Friend describes.

[Mr Jim Cunningham]

I thank my hon. Friend for giving way. I was rather surprised that the Secretary of State did not give way to me; he is usually quite generous, so I am disappointed.

More importantly, it is vital to the people of Coventry that we represent them. Their budgets—if I can put it that way—through the city council have been cut by well over 50%. That has affected libraries, children’s services, care in the community—I could give a litany. It has been a general attack on public services, whether we talk about local authorities, the health service or other services. It is vital that we know the breakdown of the £1 billion pounds that the Secretary of State just announced—I noticed that he tried to avoid that. My hon. Friend is right that central Government are shifting expenditure on to the local council tax payer, rather than facing up to their own responsibilities.

[Andrew Gwynne]

My hon. Friend, who is a doughty champion of the people of the city of Coventry, is absolutely right. What we have seen today from this Secretary of State is smoke and mirrors. He can talk about a spending power increase across local government, but that is predicated on every English local authority increasing council tax by the maximum level possible—an eye-watering, inflation-busting increase. We know that not every local authority can raise sufficient money by council tax alone, which is the reason behind the revenue support grant. A 50% cut to the revenue support grant of my hon. Friend’s city of Coventry is a big cut by monetary standards. Coventry’s council tax base does not allow the city council to raise anything like enough money to plug that gap.

--- Later in debate ---

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

We have not heard a great deal today. We expected, perhaps, a rabbit to be pulled out of a hat. Word had it that the Prime Minister had a few quid to give out, but we have not seen much of that today. It could have been used in a morally just way: it could have been sent to the areas that have suffered the biggest cuts although they also suffer the most significant deprivation. Those areas have been targeted by the Government, as has been set out today in the many excellent speeches made by Labour Members in particular.

My hon. Friend the Member for Sheffield South East (Mr Betts) said that people now questioned why they were paying council tax at all, given that the neighbourhood services that they received were being reduced. My hon. Friends the Members for Liverpool, Riverside (Dame Louise Ellman), for City of Chester (Christian Matheson) and for Liverpool, West Derby (Stephen Twigg) made the same points about the human cost of removing vital public services. My right hon. Friend the Member for North Durham (Mr Jones), my hon. Friend the Member for West Ham (Lyn Brown) and my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) outlined the very real community impact of austerity and the Government’s targeting of our communities. Through to my hon. Friends the Members for Redcar (Anna Turley) and for High Peak (Ruth George), we heard story after story of the human and community cost of austerity.

What shift did we get from the Government? Absolutely none. Why? This has not happened by accident, and the Government will not suddenly wake up and realise that they have made a horrible mistake. The policy has been deliberate and targeted from day one. The Institute for Fiscal Studies said:

“In England, cuts have been much larger for poorer, more grant-dependent councils than their richer neighbours.”

Why?

“This pattern arose directly from the way central Government allocated grants.”

That was deliberate and targeted and it has not stopped today. Despite our calls and our outlining the real human cost, the policy continues.

[Mr Jim Cunningham]

If the Government were serious about helping women and bringing an end to austerity, they could have funded local authorities to give free bus passes to the women they robbed of their pensions. Surely they could have done something like that.

[Jim McMahon]

The Government have been very good at shifting money from those who need it most to areas that will secure the support of their Back Benchers. How many times today have we heard Conservative Back Benchers praising their Front Benchers and thanking them for giving in to their lobbying? So much back patting has gone on as Government Members congratulate each other on taking food off the tables of the poorest in society to shift funding to the richest.

We have heard time and again from Conservative Members how much more expensive services are in rural areas. There is no doubt that some services are more expensive to deliver in rural areas by unit cost. However, let us look at the evidence. In 2014, the Government commissioned a report that examined every single service that local authorities deliver throughout England. It showed that it is true that some, but only 15%, of services are more expensive in rural areas. In urban areas, 31% of services are more expensive, and whether areas are urban or rural has no bearing on the delivery of 50% of services. The evidence therefore shows that services are more expensive to deliver in urban areas. That is because the deprivation is ingrained and generational. It is tied to the local economies, and councils are there to try to keep it all together.

When our communities have asked for hope and direction, what have they been given? Not even warm words or an acknowledgement of the human cost. Now more than a million older people do not get the social care they would have got in 2010. Children who are at risk of violence and abuse are not given the protection they need, because the Government have walked away and said that it is nothing to do with them. It is everything to do with them. When other Departments were fighting their corner, where was the Ministry? When austerity first struck, local government was hit hardest. We have lost 800,000 members of staff from local government. We have the lowest number of staff since comparable records began, yet the central Government workforce is the largest since comparable records began. Local government has taken more of a hit than any other Department. Within local government, Labour-controlled areas have taken the hit, and that is politically motivated.

The Government had the chance to put this right today. They have failed to be fair and just, and failed the people we come into this place to serve. Shame on the lot of you.