Local Government Finance Bill

Debate between John Healey and Helen Jones

Monday 21st May 2012 Commons Chamber

[John Healey]

Perhaps, Mr Deputy Speaker, I had better not pursue that. However, it is certainly true that given their drubbing a couple of weeks ago, the Liberal Democrats will have to chase votes wherever they can find them.

Amendment 1 is designed to challenge the Government to concede, and to give a commitment to this House, that should they use their powers under the Bill and make stipulations about the schemes that local authorities will run, they will at least consult local government before doing so.

Amendment 3, which also stands in my name, exemplifies my belief that, as my right hon. Friend the Member for Greenwich and Woolwich argued, this is a rushed reform that has been introduced without an ear to proper consultation or a thought to the consequences. The amendment attempts to flush out whether the Government have properly considered the impact of the Bill in relation to the provisions of the Localism Act 2011, which allows a local authority, in setting its budget and its council tax, to put to the vote in a referendum a level of council tax that it might want to propose for its area, and allows local residents to veto what they may regard as excessive council tax rises. Under those powers, a local authority must hold a referendum no later than the first Thursday in May of the financial year to which the council tax would relate. In practice, that means that a local authority will have to run contingency spending plans, budgets and council tax levels until the result of the referendum is known, and if it is unsuccessful, those contingency budgets will need to be put in place and new council tax bills issued. That process must take place around the turn of the financial year, and by early May at the latest, yet the Bill requires that the council tax support scheme must be designed and in place by January—before most local authorities finalise and agree their budgets and council tax levels, and certainly before the level in any referendum might be established.

That mismatch indicates that this reform is ill thought out, rushed and likely to be wrong, and it reinforces the arguments that my right hon. Friend made about his amendments 6, 7, 10 and 13, to which my name has been added. There are good reasons for making this part of the benefits system local, but there is no justification for doing it by making harsh cuts to the national and local totals of spend available, by capping the totals against any future rise in needs or costs, by requiring local councils to carry all the risk of any increases in claims, or by forcing very big cuts in council tax support for many of those who need it most.

When we last debated this in Committee in January, my right hon. Friend and I noted that councils were faced with an extraordinarily tight timetable of 12 months until the point at which they would have to have these new schemes in place. That period is now eight months. There is no time to consult local residents, to design the computer software systems necessary to run these schemes or to test them and put them into practice, to work out how the tapers to the new universal credit system will have to work with the council tax support system, or to plan for the new local scheme in the context of next year’s budget planning by local authorities.

This is a disaster waiting to happen. The Government have not done the work needed for local government to do the work that it needs to do. I say this to Ministers: take a leaf out of the Health Secretary’s book, pause, listen, and be prepared to put back the start of this scheme from April next year to April 2014.

[Helen Jones]

It is a pleasure to follow my right hon. Friend the Member for Wentworth and Dearne (John Healey), whose speech was not only very passionate but extremely well informed.

Nothing could illustrate better what a shambles of a Bill this is than the seriousness of the new clauses and amendments that the Government have tabled at this late stage. It is, frankly, a gross discourtesy to the House to bring these issues before us with little notification and little opportunity to discuss them. Because we have not been allowed to take evidence on the Bill, we have had no evidence on the new clauses. We would have benefited from evidence on them, particularly from legal experts. Although the Minister assures us that the new clauses replicate powers that are already in existence, that is debatable. He could not answer a number of the questions that were put to him about how inaccuracy in data records could be challenged, which electronic records could be accessed under the powers, and how the powers would relate to a person’s personal electronic data that are held on their own PC.

Every council will, of course, need the right system in place to tackle fraud—nobody would argue otherwise. However, it is interesting that we have heard nothing from the Government in this debate about the reductions in council staff, which are making it much more difficult to tackle fraud, or their desire to abolish the Audit Commission, which is the very body that searches out fraud and assists local councils in tackling it.

I am concerned about some of the measures in the new clauses. Some of them do indeed replicate those in the Social Security Administration Act 1992. However, the Minister cannot explain how one can commit an offence other than dishonestly and he cannot explain the offence of

“allowing a person to fail to notify”

something. What on earth does that mean? Does one have to be under duress, or not? What is the definition of the word “allowing”? What kind of proof is required? Above all, what will the defence against those offences be? That is not clear from what is before us. I want to see dishonest people banged up in prison or fined, but I want people who have made an honest mistake to have a proper defence for any charges that are brought against them. It is a great shame that we were not allowed to discuss the new clauses in Committee.

I want to concentrate on new clause 5, which I tabled with my right hon. and hon. Friends. The Government’s plans for council tax and what we have heard from them today clearly demonstrate how remote they are from the realities of life for many people in this country. They propose to take money away from some of the poorest people, including, as my right hon. and hon. Friends have said, people who go to work every day to earn their poverty. People with disabilities and families with children will pay the price for the incompetence of the Government. Many of them will already have lost tax credits or disability living allowance, which is being cut by £2.7 billion. It is estimated that about 400,000 disabled people will lose employment and support allowance when it is time-limited to one year for people who have paid national insurance contributions. Those very people will be hit again by the Government’s plans.

The Government consultation document said that they would

“seek to ensure that the most vulnerable in society, in particular low income pensioners, are protected”.

Pensioners are indeed protected from the cuts, and we do not disagree with that. However, coupled with the 10% cut in the amount that is available, that means that other people, many of whom are equally vulnerable, will face council tax increases. That is something that the Liberal Democrats do not seem to understand, but it is simple mathematics.

The Government’s default scheme in their so-called statement of intent replicates the current scheme and gives protection to many more vulnerable groups. The intent, I suppose, is to penalise councils financially. However, it is difficult to argue that we should protect vulnerable groups in the default scheme, but not legislate for that protection elsewhere.

There is no protection for people with disabilities—not even for those who are placed in the support group for ESA. Those people are, by definition, unable to seek work, even if it was available, which is not likely given the current flatlining economy. There is no protection for people placed in the work-related activity group, who are not expected to

“seek paid employment to increase their income”.

They are asked to take steps to increase their employability, but they are not yet expected to seek work. That shows how spurious is the Government’s claim that they are doing this to spur on local councils to get people into work. That is nonsense.

Local Government Finance Bill

Debate between John Healey and Helen Jones

Tuesday 31st January 2012 Commons Chamber

[John Healey]

My hon. Friend is making the clear and strong case that the new scheme will increase the financial risks to local authorities. Does she accept that local authorities will therefore have to increase their financial reserves, and to do that, they will have to increase the cuts that they make to expenditure, and possibly to services?

[Helen Jones]

My right hon. Friend has got it exactly right. In fact, throughout the passage of the Bill, we have seen that much more instability will be built into the system, whether that is on business rates or council tax localisation. The inevitable consequence is local authorities building up bigger reserves, because no local authority finance officer would advise their authority to do anything else; it has to be prepared for the worst-case scenario.

[John Healey]

My hon. Friend is making the case very cogently that council treasurers will take a prudent view; does she agree that that runs completely counter to the advice that councillors are getting from the Secretary of State, who is talking about reserves being “piggy banks”, and who says:

“These untapped funds exist to ensure councils can respond to unexpected situations like the pressing need to tackle the nation’s unprecedented level of debt”?

That advice clearly runs contrary to the principles of good local government, and it simply will not and cannot be followed by councils.

[Helen Jones]

My right hon. Friend is again absolutely right. The Government are a little schizophrenic on this, saying to local authorities, “Don’t build up big reserves,” while at the same time building instability into the system, which will require local authorities to build up bigger reserves.

Local Government Finance Bill

Debate between John Healey and Helen Jones

Tuesday 24th January 2012 Commons Chamber

[Helen Jones]

I am grateful to the hon. Gentleman, who makes a fair point about regulations. I do not know whether they will be with us before Third Reading, but at that point we will have finished debating the Bill in Committee, so it will not be terribly helpful. He makes an interesting point about what he sees as a disproportionate gain. However, the problem is that that is not what Ministers see as a disproportionate gain. That is why we are trying to get some definition into the Bill. Local authorities cannot plan unless there is some certainty in the system, and as yet we do not know what it will be.

[John Healey]

My hon. Friend is developing a powerful case. As my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) said, the Committee should at least expect to see confirmation of the principles on which judgments about disproportionate benefit will be made and on which any levy will be based, but that is not in the Bill. The principles on which a levy would be based are not even set out in the response to the consultation that was published in December. That is not good enough, and we expect more from the Minister and his colleagues.

[Helen Jones]

Again, my right hon. Friend makes a telling point. The consultation document merely says that there will be a proportionate levy. The obvious question to put is this: “What is the proportion and how will it be decided for each authority?”

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[Helen Jones]

That is an important point. Whatever happens, some local authorities cannot win.

[John Healey]

Clearly, prudent councils will set sums by against risk. The central problem with the system is its unpredictability and volatility. To make provision against risk, one has to be able to quantify it. That is highly uncertain. For instance, how would the treasurer of Brentwood council—the Secretary of State’s local council—have been able to anticipate a drop of more than a third in the business rates revenue last year? It was probably due to factors beyond their control, and they would have been unable to hedge against and provide for that sort of risk.

Local Government Finance Bill

Debate between John Healey and Helen Jones

Wednesday 18th January 2012 Commons Chamber

[Helen Jones]

My hon. Friend makes an extremely good point, which I will come to in a moment.

If the Bill comes into force, one extremely complex system will be removed and replaced with another extremely complex system, without time for local authorities to prepare for it.

[John Healey (Wentworth and Dearne) (Lab)]

Before my hon. Friend moves on from the question of evidence, I do not want her to overlook the value of such evidence. Does she agree that democracy works better when a wide range of organisations has an opportunity to contribute effectively to our discussions? Evidence sessions in a Public Bill Committee give organisations that represent people with a wide range of interests the chance to assess, analyse and propose amendments to improve legislation. That stage will be sorely missed because of the way in which the Government are handling the Bill.

[Helen Jones]

I could not agree more with my right hon. Friend. Since I have entered this House, I have learned that the best way to improve legislation is to scrutinise it effectively and listen to those who will have to deal with it when it comes in. If the Government chose to take evidence, they would have ample opportunity to table amendments to the Bill in Committee or on Report.

--- Later in debate ---

[Helen Jones]

My hon. Friend, as usual, makes an interesting point, but he is tempting me to go beyond my remit and discuss the procedures of the House. Perhaps the Procedure Committee could look at that point.

[John Healey]

Before my hon. Friend moves off the question of procedure, does she agree that it is important that we do not lose sight of the fact that the introduction of evidence sessions as part of the Public Bill Committee process, as opposed to the Standing Committee process, was one of the good reforms of the previous Parliament? The hon. Member for Poole (Mr Syms) is right that there is useful expertise across the House from Members with a background in local government. However, unlike the previous consultation and the public statements of Ministers, evidence sessions would give members of the Committee and Members who are following the legislation time and help in getting to grips with the content of the Bill. It serves our purpose, as well as the wider purpose of better legislation, to have those evidence sessions and not to put them to one side, as the Government are doing in this case.

[Helen Jones]

My right hon. Friend is right. We do have a lot of expertise across the House, but we need up-to-date and informed expertise, which is what evidence sessions give us.

NHS Reorganisation

Debate between John Healey and Helen Jones

Wednesday 17th November 2010 Commons Chamber

[John Healey]

The treatment centres, which the hon. Gentleman mentions, helped contribute to bringing waiting times down to 18 weeks and helped to say to the British public, “Whatever treatment you need in hospital, you will not have to wait more than 18 weeks for it.” That was a consistent universal promise that we were able to make to patients as a guarantee for the future. That has now been ripped up, and we can see the result as waiting times and waiting lists lengthen. As I said at the start of my speech, my fear is that during this period of Tory leadership, we will see the NHS going backwards.

As for the hon. Member for St Ives (Andrew George), I understand his problem. He is a Liberal Democrat and I have to say that this health policy bears very little of the Liberal Democrat imprint. The one part of the Liberal health manifesto that they managed to get into the coalition agreement was this:

“We will ensure there is a stronger voice for patients locally through… elected individuals on the boards of their local primary care trust”.

Within two months, of course, that was not even worth the coalition agreement paper it was written on.

[Helen Jones (Warrington North) (Lab)]

Does my right hon. Friend agree that there is something else that the Government are not telling us—namely, the huge cost of getting rid of primary care trusts and strategic health authorities in respect of redundancy and getting out of broken contracts? Does he, like me, speculate that many of the people affected will end up working for GP consortiums or private health care firms—a huge cost to the public purse that delivers not one iota of front-line care?

[John Healey]

Quite so. Estimates of the cost of the reorganisation are up to £3 billion, but we have not had any cost announcements from this Government, who will not tell us how much is going to be spent on reorganisation rather than on patient care. At a time when finances are tight, this is precisely the wrong prescription for the NHS over the next few years.

It is no wonder that GPs have grave doubts—they trained as family doctors, not as accountants or procurement managers, and they are committed to treating patients, not doing deals over contracts. However, they will be forced to commission services, whether they like it or not; they will make rationing decisions, not just referral decisions for their patients; and they will have to take on the deficits or inbuilt funding shortfalls in their PCT areas. GPs spend an average of eight or nine minutes with each patient. If they plan, negotiate, manage and monitor commissioning contracts in future, they will have no time left to see patients. If they continue to be family doctors, commissioning will be done for them, not by them; it will be done in their name by many of the same PCT managers who presently do the job or by commercial companies that have already started hard-selling their services to GPs. The other day I picked up “The Essential Guide to GP Commissioning” helpfully published by United Health—one of the biggest US-based health care companies in the world.