Local Government Finance

Debate between Jim McMahon and Richard Graham

Tuesday 5th February 2019 Commons Chamber

[Richard Graham]

No, let me make this point first.

I remember how Labour grew the cake in Gloucester: by shrinking the economy; by spending furiously on public services while 6,000 of my constituents lost their jobs in business, apprenticeships dried up, and engineering and manufacturing were on the verge of closure, as my Labour predecessor blithely ignored the fact that we had the second worst-performing secondary school in the country; by churning out youth unemployment; and by closing the King’s own post office. We know all about Labour growing the cake, going bankrupt, increasing unemployment—like all Labour Governments—and then complaining about austerity when Britain calls for the Conservatives to sort things out.

Let this House not forget that it was the last Labour-run—

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

indicated dissent.

[Richard Graham]

The hon. Gentleman should listen to this. It was the last Labour-run city council in Gloucester that sold the car park for a pound and bought it back for a million. Let us also not forget that the current Leader of the Opposition claimed that 672 Gloucester City Homes tenants had been thrown out, although the actual figure was eight.

We do not need to take any lectures from the Opposition on growing the cake, but does that mean that every Conservative Government get it right? No, of course not. I wish to highlight briefly some of the issues for us in Gloucester. Library research confirms that Gloucester is in fact the worst-affected council, with a year-on-year spending decrease between this year and next of 4.4%. The council’s core spending power fell by more than 8% over the past four-year period.

In today’s world, we know that all second-tier councils must do as much as they can to generate efficiencies, whether by generating savings from increased productivity, merging their back offices, sharing space with other authorities or scrapping the mayor’s car—you name it. That is what every good council should be doing and it is what Gloucester City Council has done. The truth is, though, that as an urban district authority, it is difficult for us to grow and generate new homes bonus, because we have only 5 square miles of land. We are penalised by the deadweight calculation, which is the starting point of the number of homes, and we do not benefit as much as we could from business rate retention, although we are part of the pilot project in Gloucestershire.

The council is a good one. It is well rated by peer group reviews and respected in the city. It is leading on creative physical regeneration, with an award-winning bus station that is much admired in Cardiff and elsewhere, and making real progress on human regeneration by making sure that rough sleepers are helped into housing through the social impact bond and gearing up for a new homelessness hub, both of which are funded by the Government. None the less, the additional costs of dealing with homelessness issues are greater than the extra revenue we were given.

The Minister, who did see Gloucester and Cheltenham councils, at my request and that of my hon. Friend the Member for Cheltenham (Alex Chalk), has made some pragmatic decisions, but they do not, I am afraid, resolve the financial problems that my city council faces. These include issues such as pension contributions and the business of council fees and charges income. Despite being able to raise our precept, we will not, I am afraid, be able to match the costs if our city expects the delivery of the services that it so values at the moment.

I would love to ask the Minister this: will he have not a full blown review of local government funding, as the hon. Member for Liverpool, West Derby (Stephen Twigg) called for, but arrange for a senior official to look specifically at our city council and offer advice on whether the system is working for us and fair, and what more we can and should do to raise the revenue to deliver the services that are so valued across our city of Gloucester?