Communities and Local Government (CSR)

Debate between Justin Tomlinson and George Hollingbery

Thursday 13th January 2011 Westminster Hall

[George Hollingbery]

Plainly, this is not a debate only about cuts, and plainly it is an occasion for Back-Bench contributions. It should centre on the evidence given to the Select Committee. Those points were raised in the Select Committee, which is why I refer to them. I notice that the right hon. Gentleman did not answer the question; he did not seek to identify what else he would change. That is fair enough; he is not obliged to do so. However, I posed the question and it was not answered.

The Department has led from the front, and it is right to identify that. The hon. Member for Sheffield South East (Mr Betts), the Chair of the Committee, talked about a 68% reduction in spending within the Department. We have had a small debate this afternoon about whether that is the right number. I understand the point he made about the Department needing to identify exactly what money is being transferred down, such that the figure drops from 68% to 33%. In evidence to the Select Committee, the Secretary of State was adamant that it was 33%, and I think that at this stage we must take that as given. The number of directors general is being cut from six to three; and the number of directors from 26 to 20 in the current year and 16 in the following year. That is a Department leading by example, and we should applaud that.

Considerable efforts have been made in the settlement to protect the most vulnerable authorities. Plainly, those authorities that receive the most grant are those that represent the most vulnerable people. It is a truism that in times of cuts and grants to local government, those that receive the most are likely to see the biggest cuts. We have to admit that that is the case. That is bound to be the case in absolute terms. The Minister for Housing and Local Government admitted such in his evidence. However, the Administration bent over backwards to try to mitigate the effect of those cuts. They would have been very much worse if mechanisms had not been put in place to damp the effects. We saw the new banded floors, the adjustment of the relative need formula and, of course, £85 million of transitional funding.

While there is a correlation in the graph produced by the Scrutiny Unit that shows that some of the most deprived areas will see the biggest cuts, the effect was hugely reduced by the actions that were taken. I do not think that in the circumstances the Government had any alternative but to reduce spending. Therefore, there was always going to be that effect. However, they have done as much as they possibly could to mitigate that effect.

[Justin Tomlinson]

Does my hon. Friend agree that not all cuts are bad? Those on fixed incomes or facing a pay freeze would welcome plans to freeze council tax and cut out any potential rises.

[George Hollingbery]

Of course I agree with that. There are plans, as Members will know, to freeze council tax in the current year, and money has been provided to do so. There are also many innovations that can be moved forward. It is a terrible cliché, but necessity is the mother of invention, and I hear a lot of extremely exciting plans to save money across local councils. I will return to those in a moment.

In evidence to the Select Committee the Minister for Housing and Local Government said:

“If most of your funding comes from the Government, rather than from other sources as a local authority, even if you take the most extreme measures, which we've taken by increasing the deprivation index and doing all those other things—three specific steps—you still end up in a position where spending power is reduced more in areas where the primary source of function is the taxpayer.”

The Government admit that that is the case and huge efforts have been made to try to get round it. There is recognition of that in other parts of Government. The national insurance contribution holiday for small business start-ups applies to those areas of the country where there is more deprivation. Areas in the east and the south-east are specifically excluded from the NIC holiday. Therefore, we would expect to see a growth in new businesses in those areas that receive that stimulation. That is a substantial budget that should not be ignored.

To return to some of my local councils: Hampshire country council has lost £45 million of formula grant in distribution changes since 2003-04. Evidence to the Select Committee has shown that the grant per head in the south-east is about £375, and £700 or thereabouts in the north-east. Those of us who know about local government will understand that that is right. There should be less funding in the south-east. We are a wealthier part of the world, and that is to be expected. However, Hampshire will lose another £71 million of grant in the current year. To hear the leader of Manchester city council talking today about his cuts in budget as representing

“re-distribution of money from Manchester to more affluent areas”

in the south, beggars belief.

Local Government Funding

Debate between Justin Tomlinson and George Hollingbery

Monday 6th December 2010 Commons Chamber

[George Hollingbery]

My hon. Friend clearly demonstrates that there is no real excuse for local authorities pretending that we cannot do anything because we do not know how big the cuts will be. Straightforwardly, we know that there will be cuts, and we know that they will be serious.

There are any number of innovative third-sector partners out there doing a fantastic job. I would like to pick just one example from my local area—although it works out of the constituency of the Financial Secretary to the Treasury, my hon. Friend the Member for Fareham (Mr Hoban)—which is the You Trust. I recently met Nicola Youern, who runs the trust. The You Trust has a fantastic way of dealing with new cases, which Hampshire county council brings to it, of difficult-to-house young people. The trust first asks, “What can we teach you to do for yourself?” and then asks, “What can we teach your relatives and friends to do for you that will stop us having to intervene?” The trust goes through that sequence of trying to help people, before saying finally, “The only way we can deal with this is through a public sector intervention.” If there were more of that thinking across the public sector, we would get better results for less money.

I also welcome one or two changes that I think—I hope—will shortly appear in the localism Bill. The reporting changes are clearly very welcome. As the performance management portfolio holder for Winchester city council until recently, I was in charge of producing the statistics that we had to relay to central Government, almost none of which was used to create real change in the council but almost all of which were incredibly burdensome to collect.

[Justin Tomlinson]

Does my hon. Friend agree that the statistics rarely, if ever, matched what local residents said on the doorstep?

[George Hollingbery]

Indeed. My favourite was on the time taken to re-let a council house, whereby the better we did in re-letting a difficult-to-let council property the worse the statistic became, because of the longer average period for which we had not re-let the house. Every time we re-let a house that had been on the books for three years because it was in a poor condition, the worse our statistic became.

The work also involved a huge amount of management time. We had specialist employees dealing with just that issue and a specialist computer system just to monitor performance management, so I very much welcome rowing back the amount of information that local councils will have to report to central Government. I also became extraordinarily fed up with the number of strategies that we had to deal with, and I would very much welcome an assurance from the Minister that we will not have to do anything like as many of those, either.

I remember fondly the black and minority ethnic strategy for Winchester city council, an entirely necessary document.