Local Government Finance (England)

Lord Beamish Excerpts

Wednesday 9th February 2022 Commons Chamber

[Michael Gove]

I talked to James Jamieson this morning, as I do most weeks. One reason why he leads the LGA is that he is a brilliant Conservative council leader. If James were here, I think he would say he was not criticising but encouraging us, as any friend would, to do even better. It is striking that the welcome that the local government sector gave this year’s funding settlement was broader, deeper and more cordial than it has been for some years. Politics being politics, any sector will always, entirely understandably, want its champion to be someone who can ask for more.

[Mr Kevan Jones (North Durham) (Lab)]

I note that the Secretary of State does not want to talk about what has happened in the past, but my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) raised a point about need. It was no accident that the Government took the needs formula out of the local government settlement, meaning that areas such as mine and hers, which have high demand for social services—County Durham has over 900 looked-after children in care—have been the net losers. I am sorry, but it is not about pitting cities or areas against one another; it is just a matter of fact that certain areas have higher demands because of their demographics. That has to be taken into consideration, but the Secretary of State’s Government took the needs formula out during the coalition era.

[Michael Gove]

The right hon. Gentleman makes a number of points and ensuring that I addressed them all would mean that I would be here well after the moment of interruption. We could discuss the difficult economic situation that the coalition Government inherited in 2010. We could discuss the way that we unringfenced funding to ensure that local authorities could respond to that. We could discuss the particular way in which some local authorities, irrespective of political colour, were able to use their resources more effectively. We could discuss the way in which interventions beyond direct local government funding under the coalition Government sought to address deprivation. It is striking, for example, that between 2010 and 2014 the Education Secretary—whoever he was—managed to introduce a pupil premium that saw millions flowing to the very poorest students, an initiative that had not been introduced under the previous Labour Government and that helped to close the gap between advantaged and disadvantaged children.

The right hon. Member for North Durham (Mr Jones) is an brilliant campaigner for citizens in Stanley and North Durham. He makes his case effectively and he is right to remind us that when we look at local government finance it is important to bear in mind need and deprivation. That is what we are doing as we look overall at how we can review local government funding later on.

[Mr Jones]

rose—

[Michael Gove]

I can never resist the right hon. Gentleman, so I am happy to give way again.

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[Mr Jones]

The Secretary of State just does not get it. Those were not options; they were political choices taken by the coalition Government. The point that my hon. Friend the Member for Salford and Eccles and I are making is that on issues such as looked-after children and adult social care—he should remember that in County Durham life expectancy has gone down in the past 10 years—it is not optional for councils to intervene. They have a statutory obligation to do so and if that is not taken into account in the formula, councils in areas such as County Durham and Salford and Eccles will always be at a disadvantage because the right hon. Gentleman’s Government, of which he is a part, took that out of the funding formula.

[Michael Gove]

Again, the hon. Gentleman—my apologies, the right hon. Gentleman, and quite right too —makes three important points. On looked-after children, the whole position that we have had to take over the past 10 years on children in social care has been driven by a variety of factors that mean that we deal with the challenges of looked-after children and children at risk of abuse and neglect in a more intense fashion. That is why Josh MacAlister’s review of children in social care is so important and I hope that when it is published the right hon. Gentleman will welcome it.

On adult social care, the right hon. Gentleman is absolutely right that there is a greater degree of pressure, not just because we have an ageing population, although I note his important point about life expectancy in County Durham, but because we have more people moving into adulthood who, thanks to advances in medical care, also require social care. That is why in this settlement local authorities can make use of more than £1 billion of additional resource specifically for social care. On top of that funding, as was outlined in the presentation of the White Paper earlier today by my hon. Friend the Minister for Health, £162 million in adult social care reform funding is also being allocated to help local authorities.

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[Lisa Nandy (Wigan) (Lab)]

I enjoyed the Secretary of State’s debate with himself on what I was about to say; let me try to enlighten him. I must say, having treated us to a lecture about the causes of the global financial crash and the reasons for the deep and harsh cuts inflicted on our communities in the past 12 years of Conservative Government, he struck a different tone from that struck yesterday with northern leaders at the convention of the north. When he was challenged by the Liverpool Echo about whether the Government accepted that they—and he personally—played a role in the problems that he has been dispatched to solve, he said:

“You can never know with…hindsight whether”

those decisions “were judged just right”. I will leave it to Members to decide whether the Secretary of State is saying one thing to the House and another to the north of England. To misquote Eminem, “Will the real Secretary of State please stand up?”

The trouble is that the core spending power that the Secretary of State has trumpeted in press releases comes from our pockets. Bills have gone up and shopping costs more, so, as he should well know, people across the country are trying to keep their heads above water. Surely he can see the problem with the settlement that he has brought to the House today. For a decade, people have had money stripped out of their places and taken out of their pockets by the Government. The council tax rebate does not compensate us for that; nor does his settlement for councils. He has given us a partial refund on our money and asked us to be grateful.

Unsurprisingly, the Secretary of State was not asking people to be grateful for that last week when he was touring the country trying to sell his White Paper to a sceptical public. He did not say to people in Grimsby, Blackpool and Liverpool that this is the offer on the table from the Government: they can pay more to stand still or pay the same and get less. For all the gloss on this announcement, he is continuing to cut the central fund to councils in real terms, so, if places want to get the spending power that he promised, taxes will have to go up. That is a direct consequence of the decisions made by Ministers and the Tory Government.

[Mr Kevan Jones]

Does my hon. Friend agree that it is actually worse than that? For local authority funding, in the last 10 years—we continue to have it today—we have had a movement away from central Government funding and on to local council taxpayers, and areas such as County Durham, where 56% of properties are in band A, are severely limited in their ability to raise that revenue, whereas areas such as Surrey can raise a lot more. The net effect is a movement of resources away from areas such as County Durham to places such as Surrey.

[Lisa Nandy]

My right hon. Friend is exactly right. Worse than that, it is at a time when people can least afford to bear it. Walk into any community in any part of the country and we find people talking about the impact of runaway inflation under the Government and their inability to pay their gas and electricity bills and meet the costs of the weekly shop. How can the Secretary of State look them in the eye and tell them that he is forcing council tax rises on them of 3% in just a few months’ time, and that is on top of the increases in national insurance that his Government are so determined to bring in?

In 2019, the Secretary of State promised that people will keep more of what they earn and more will be invested in public services. That was an election promise, and it turns out that neither of those things is true. In the past seven years, the proportion of funding for local councils from central Government has nearly halved. The Government are doing less, so people are having to do more, and they have made people pay £10 billion more in council tax this decade.

Just yesterday, the Secretary of State was in Liverpool telling our northern leaders that they should

“judge us on our actions in the future.”

How about we judge him on his actions right now? How on earth did he get here—a Conservative politician, who once promised that hard-working people would keep more of what they earn under a Conservative Government, throwing new taxes on struggling families like confetti and treating the British public like a cash machine? This is the consequence of a high-tax, low-growth Government, and in every community people are paying the highest possible price for this Tory Government.

How can the Government have got their priorities so wrong? This week, BP announced £10 billion in profits, but while we said that oil and gas companies should pay more in tax so people could keep more of their own money—remember that phrase?—the Secretary of State backs the oil giants, and all this Government have done is offer families a dodgy loan to ease the pain now and to be paid back later. They have stripped £15 billion from our councils over the last decade, and in the last couple of weeks, with one stroke of a pen, they wrote off £13 billion of our money to fraudsters and dodgy contractors.

Where is the investment we were promised? Even after getting levelling-up funding, in 144 areas, people are £50 million worse off. North-east Lincolnshire, Dudley and Hyndburn have all lost under his deal. Blackpool, which the Secretary of State visited last week—and it is a town, by the way, not a city, if he wants to let the Prime Minister know—is down 1.92% in real-terms in funding to its council. Does he not understand what councils are dealing with? We are still in a pandemic, and these are the people who stepped up to run test and trace services when the Government failed. These are the heroic people—the council workers, the public health workers, the NHS workers—who rolled out the vaccine in record time.

Two days ago, the Government cut the public health grant in real terms, telling councils to pick up the slack. These are the same councils that have a half a billion pound funding shortfall for children with special educational needs. Remember the Sure Starts that the right hon. Gentleman closed—over 1,000 of them across the country—when he was the Education Secretary? Remember the time he lost a High Court battle for slashing funding for nursery children? On his watch, he set in train a process that saw spending on vulnerable children fall by half over this decade.

Actions have consequences. The Secretary of State said yesterday that he understood why we would be cynical about a Government Minister coming and promising us the earth. Well, we are not cynical; we are furious. We are still paying for what he did as Education Secretary, so when he rocks up and tells us that we can have less to do more, and talks about renaissance Florence and the rise and fall of the Roman empire, we have had enough. Our local leaders, meanwhile, are living in the real world—grappling with climate change and rising transport costs—and having to compensate for what the Government have taken from us and our communities, with all the added costs that come from inflation at a 30-year high.

The Secretary of State must know that by far the biggest factor driving up costs is the crippling cost of social care. We have just had an exchange about that in the House, because it affects every single community in this country. However, this is also at the heart of levelling up, because it is our towns that are ageing as good jobs have left and young people have had to get out to get on. These are the places where pressure on social care is most acute, but they are also the places where property prices are lower and the rise in council tax that he is promoting and forcing on people across this country produces the least. When his Department steps down, as it is doing today, these are the places least able to step up.

That is how we get a settlement in which parts of this country have fallen further and further behind while others have pulled further and further ahead. This is what he was tasked with fixing. That is before we even consider that, for six years now, the Government have been wasting our time, announcing and re-announcing intentions to review the system, yet all we have again for the fourth year in a row is a one-year settlement.

“Levelling up requires a focused long-term plan of action”.

Those are not my words, Mr Speaker, but those of the Secretary of State in his White Paper that he published last week.

We are getting sick and tired of the spin and the hype. Levelling up surely has to mean levelling with us and being honest about what this Government are doing. We are getting big promises and nothing to show for it. People are not fools, though; they can see through the shine, through the press releases, and see that life is getting harder and harder under this Conservative Government. Today should have been the day when the Secretary of State set that right, but instead he came with more of the hype, more of the slogans and more of the spin. It will not do.

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[Richard Drax (South Dorset) (Con)]

It is a pleasure to take part in this debate and to follow both the hon. Member for Sheffield South East (Mr Betts) and my hon. Friend the Member for West Dorset (Chris Loder), who is sitting beside me.

I give credit to our leader, Councillor Spencer Flower, and our chief executive, Matt Prosser. I also agree with the hon. Member for Wigan (Lisa Nandy) that we should thank all staff and officers, who have done a fantastic job over the pandemic in particular. I welcome the good news that they are all heading back to their offices now—the sooner the better, frankly.

I have huge respect for my right hon. Friend the Secretary of State, and I know he understands, being a true Conservative, that the best way to raise money is to lower taxes. The sooner we have some really bright blue Tory policies to do that, we will get more money for the Treasury, which can hopefully be better spent for local authorities and all the public services we need to spend money on. Otherwise, we will have to keep raising taxes—as Labour, of course, would do—and the pips will squeak for all of us, but particularly for the less well off, who are struggling, as we all well know.

Dorset, as my hon. Friend the Member for West Dorset has said, sets one of the highest council taxes in the country, and the unfair proportion of it lands on the Dorset council tax payers—a point that has already been made—with precept rises in various areas of council tax. I am grateful to him; we lobbied hard for the one-year settlement and we got more than we expected; we budgeted for between £4 million and £8 million, and we got £10.4 million.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Richard Drax]

I am going to crack on, because I think there are many colleagues who want to speak; I know the right hon. Gentleman will have something to say later when he is called. We got £10.4 million, for which I am extremely grateful, although some has been ring-fenced and £3.1 million is for one year only.

Statistics are incredibly dull and can be misused, but I will just utter some to my right hon. Friend the Secretary of State for the 2021-22 Budget, to exemplify our particular issue. Our income is 85% from Dorset taxpayers, versus 67% on average for other unitary councils. The business retention rate is 14% for Dorset and 24% on average for other unitary councils. The revenue support grant, as my hon. Friend the Member for West Dorset said, is zero—nul points.

That counters the notion that we have moved to a unitary council, as my right hon. Friend the Secretary of State knows, we have led the way in the country—I know the Government want to go further with other authorities—and we cannot be seen to fail. I emphasise that and ask him to take it into account. So much has been done and so much money has been saved and cut that statutory services are under huge pressure. I know he is aware of that, but let me say it anyway.

The key issue, as we have heard, is that too much is one-off funding, when we need time to plan and far more funding for further ahead: three, four or five-year funding would be fantastic, so that we can plan and have certainty. The unfair distribution of the revenue support grant means that we get none—nil. The business retention rate, as I have said, is lower in Dorset than elsewhere, and the rural authority has additional costs that are not accounted for. That is where the funding formula needs to change.

We also have an accumulated debt of £70 million on the high-needs block for children with special educational needs. The Department for Education’s support is needed to eliminate that debt. For example, one child I know is costing the council £1.5 million to get the care that they need—and rightly so, but that care has to be provided from outside the county and that is costing Dorset Council vast sums of money.

Next year’s budget proposals include a 3% increase in council tax and an almost 1% increase for the social care precept. That means that for adult social care there is a 10% increase of £13 million to £141 million. For children’s services, there is a 4% increase of £2.7 million to £74.5 million—mainly for children in care and for disabled and SEN children. On climate and ecological emergency response, £10 million in capital investment has been put aside over the next five years. Finally, £750,000 will go to support new homes under the registered provider scheme.

Those are all extreme pressures facing a rural constituency such as mine, that of my hon. Friend the Member for West Dorset, and those of other Dorset MPs. Again, my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities is aware of that, and I am grateful because, since my hon. Friend the Member for West Dorset spoke, I understand a meeting has kindly been organised by the Secretary of State’s staff. I look forward to discussing these issues, and more, with him in person, along with the council leader and chief executive.

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[Sir George Howarth]

I am pleased to hear that, so maybe he is not completely a Shakespearean tragedy. The Shakespeare North project, into which, to be fair, the Government have put a substantial amount of investment, is a huge success. I pay tribute to the Government for putting money into the Arts Council, to Knowsley Council for putting in a substantial amount, and to the Liverpool City Region Combined Authority and metro Mayor Steve Rotheram for also contributing. I should also mention the private donors, including Lady Anne Dodd—the widow of Ken Dodd—who put £400,000 into the project for a comedy space.

Knowsley Council has been the driving force behind Shakespeare North, on which it should be congratulated, and much else besides that I do not have time to go into. However, there are important projects still awaiting Government support that we had hoped would come from the levelling-up fund, such as the regeneration of Huyton town centre. Knowsley Council put forward a really good project for regenerating Huyton town centre, and I totally reject the assertion that such projects were selected on merit alone because, frankly, this project would have been far better than some that were funded. As I said yesterday, there is real concern that the levelling-up fund has so far been politically skewed in a way that means Knowsley, yet again, loses out.

[Mr Kevan Jones]

Does my right hon. Friend agree that the Government’s fixation on competition for such funding is inefficient and is clearly being used by the Government as a pork barrel? It puts a lot of pressure on councils such as Knowsley Council, which have already faced cuts, to put in the officer time to make such bids. Would it not be better to scrap the whole nonsense of bidding for this type of funding?

[Sir George Howarth]

My right hon. Friend makes a typically forceful point, and I agree with him.

Frankly, it is pretty grim to say to one local authority, “You have to be set against another authority for any project, and it won’t necessarily be based on the need of the community; rather, it will be based on a political choice that might not reflect that need.” In Knowsley’s case, the decision does not reflect the need.

As I said earlier, Knowsley is the third most deprived borough in England and it received nothing from the levelling-up fund—it was not 0.1%; it was nothing. That cannot possibly reflect a fair distribution of those resources. I made that point to the Minister during yesterday’s Westminster Hall debate, and he did not respond. I hope he will now take this opportunity to do so. I suggest to him—again, he overlooked this yesterday—that he grants a meeting to me and Knowsley Council to discuss what can be done to get the funding we need through the levelling-up fund for the regeneration of Huyton town centre.

There are some small but encouraging signs that the Government might be beginning to recognise the gross unfairness that the last decade has meant for areas such as Knowsley. I give them a small amount of credit for that, but those of us who are more fair-minded recognise the importance of need. The Government are now talking about accepting need as an important part of funding mechanisms, but we do not yet have any evidence to support that assertion.

Finally—I notice you are looking at your watch, Mr Deputy Speaker, so I had better be quick—there was a time when I chaired the local authority finance committee and understood the distribution mechanism then, which was based on multiple regression analysis. I do not know whether the Minister is familiar with that, but I have to confess that I am not so well informed on the current mechanism. I am reminded of Palmerston being asked, many years after the event, to explain the Schleswig-Holstein affair, which was a border dispute between Denmark and Germany. He replied that only three people ever understood it: first, Prince Albert, who by that time was dead; secondly, Bismarck, who by that time had gone mad; and thirdly, Palmerston himself, and unfortunately he had forgotten.

When it comes to talking about local government distribution mechanisms and formulae, I feel I am very much in the Palmerston category, but I shall undertake to do better in future. I am sure that my hon. Friends the Members for Weaver Vale (Mike Amesbury) and for Wigan are now much more expert on the subject than I am. We welcome the fact that some small harbingers of change have been promised and will watch very carefully for them actually to come about.

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[Gareth Thomas]

With all due respect to the hon. Gentleman, I do not think it will help the people of West Dorset or the rest of the UK in general if we leave London with a poor transport service. Just as I would like to see his community getting better support from the Secretary of State, I hope he might have the grace to recognise that Harrow and London in general also need to be properly supported as we come out of the pandemic.

[Mr Jones]

Is not the reason why Dorset has one of the highest levels of council tax that the Government who have been in power since 2010 have reduced the revenue support grant directly to that council and pushed it on to local Dorset taxpayers?

[Gareth Thomas]

My right hon. Friend makes an important point. I do not know whether the hon. Member for West Dorset (Chris Loder) has been challenging the Government in that regard—I think I heard a bit of gentle criticism, but perhaps he needs to make some more pointed remarks to the Secretary of State in private.

We are in the midst of a cost of living crisis, and Government Ministers are demanding further council tax rises to fund local councils, the police and transport for the elderly and the young in Harrow. That is yet another financial blow to hard-hit families. If, as my hon. Friend the Member for Wigan (Lisa Nandy) on the Front Bench rightly said at the outset, the Conservative party had not allowed so much money to be wasted on fraud, corruption and personal protective equipment that could not be used, there would be money to invest in more policing in local councils such as Dorset and, crucially, Harrow, and to invest in better services for local people in my borough and beyond.

[Mr Kevan Jones (North Durham) (Lab)]

We have just heard it in a debate on the police grant, and we have heard it in this debate with the Secretary of State: the Government are treating 2019 like year zero. Anything that happened before then was nothing to do with them. He is increasingly trying to push the narrative that decisions around funding, local government, policing, fire or anything have somehow happened by accident. They have not: they have happened because of deliberate political decisions that, in some cases, the Secretary of State—who I think has been in the Government since 2010—has taken.

My hon. Friend the Member for Sheffield South East (Mr Betts) said that the most savage cuts have been made to local government, with a 56.3% cut in the past decade. The Cameron-Osborne approach was to cut the central Government funding to councils from central taxation and push it on to local council tax payers, thereby deflecting the blame when local councillors and council officials had to take some very tough decisions. We have had the galling situation over the past 10 years in County Durham of Conservative councillors standing up and blaming the Labour council for raising the council tax, when they know the real reason is that the formula being used has shifted the way local government is funded in this country from central to local taxation.

In County Durham’s case, that means that the county council’s budget has been cut by £232 million a year—40% of the council’s budget. The hon. Member for Bromley and Chislehurst (Sir Robert Neill) referred to Lord Pickles, and in the early days, we were told, “Don’t worry about this; it can all be sorted out if councils get more efficient”—that if they had fewer pot plants in council offices, as I think was said at one stage, or stopped serving tea and coffee at meetings, or sacked all their chief officers, somehow that would fill the gap. Well, that is absolute nonsense.

Another issue that affects counties like County Durham is that we now have an inbuilt mechanism that deliberately moves money from the poor areas with the highest need, to more affluent areas. That is no accident, but the result of a political choice. I take as an example County Durham, where 58% of our properties are in council tax band A, so if we raised the council tax by 1% we would raise £3.8 million. There are a couple of higher-band properties in my constituency—there is at least one castle, which may well be in the higher tax bracket—but there are very few higher band properties across County Durham. That should be compared that with Wokingham in Surrey, where only 2.8% of properties are in band A, so if it raises council tax by 1% it generates £8.9 million. Add to that the fact that we are not just moving that money to areas of lower need, but are ensuring that the poorest people in County Durham, or Knowsley or any other deprived community, pay the most, because we all know that council tax is a very aggressive form of taxation.

That is continuing. We again have a one-year settlement, and councils are now having to work out what they will do in coming years. The Policing Minister told us earlier that when it came to the fairer funding review on police funding, the train had left the station. He gave no indication of when it would arrive. Unless we tackle this issue, councils such as County Durham will always be at a disadvantage

As my hon. Friend the Member for Sheffield South East said, there is a lot of press and PR. The Government work on the basis of slogans, gimmicks and spin, and the latest one is levelling up. I might be one of the few people who have actually read the entire levelling-up White Paper, including the annex.

[Mr Betts]

Sad.

[Mr Jones]

Yes, I am, and the hon. Member for Redcar (Jacob Young) called me an anorak, so possibly I am both.

The White Paper’s analysis is not bad in that it raises the issue that we should be tackling, but it offers no solution to enable us to do that. I really enjoyed the undergraduate thesis on the Venetian city state and how Babylon was built, but again it did not reach any conclusions. Nevertheless, we have a Government who talk in terms of levelling up. My hon. Friend the Member for Sheffield South East is right: you cannot have levelling up if you exclude the way in which local government is financed.

The other sad thing is that the Government’s approach has mainly been around capital projects. I think it is because the Prime Minister has a fixation—he has a fixation on quite a few things—on projects where you can see that something is being built. No doubt a Minister or local Conservative Member of Parliament can unveil a plaque and say, “This is what we have achieved.” As my right hon. Friend the Member for Knowsley (Sir George Howarth) said, if it was a fair process, fine.

I used to have a saying, when I was in local government, that any idiot can spend capital, which they can. The more difficult thing is to get the revenue streams into the future. Like my right hon. Friend, distantly I used to understand local government finance, but no doubt my knowledge is a bit out of date. What I do recognise is that we can spend as much capital on projects as we like, but what is needed is the revenue funding to go alongside it for the day-to-day needs of our local communities.

My right hon. Friend the Member for Knowsley covered the bidding process very well, but the point is that, if it were a fair process, then fine, but it is not. Quite clearly, it is a pork barrel approach to the doling out of money to certain Conservative seats. Let me give an example in County Durham. Which constituency has either got new towns funding or levelling-up funding? The answer is Bishop Auckland.

[Michael Gove]

A great place.

[Mr Kevan Jones]

I do not disagree with the Secretary of State. County Durham is a wonderful county. It has some great towns and, more importantly, great people. But why did Bishop Auckland get that money as opposed to any of the other towns in County Durham? Well, it has a Conservative Member of Parliament. I doubt that it will be getting much funding in the future, following the recent antics of the hon. Member for Bishop Auckland (Dehenna Davison), with her criticism and plotting against the Prime Minister. She will be on the naughty step for a while, and will not get any future funding. The important thing is that this must be clear. I also question the bidding process. The problem with the process, as my right hon. Friend has said, is that it takes a lot of time and effort to take this through. Officer time is taken up, and councils are limited in the amount of officer time that they have. Then they have to go into some beauty parade, which is clearly rigged by the Government. The real issue in terms of levelling up is this—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I did not want to jump in as a kneejerk reaction, but I have been considering what the right hon. Gentleman has just said. He has made a very serious criticism of a Member of this House. I just want to check whether he has given notice to the hon. Lady that he intended to criticise her on the Floor of the House?

[Mr Kevan Jones]

I am not aware how I criticised the hon. Lady, Madam Deputy Speaker. If you could illuminate and tell me how I did, I would be quite happy. I would not necessarily want to criticise her.

[Madam Deputy Speaker]

The right hon. Gentleman most certainly made reference to another Member. My interpretation was that he was criticising her, but the point is that he made specific reference to her. I just want to check that he gave her notice of his intention to do so.

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[Mr Kevan Jones]

I am sorry, but I do not know where in Standing Orders it says that you have to give notice. If a Member is criticising someone or raising a point, I agree with you, Madam Deputy Speaker, but when a Member is referring to a Member, which is what I did there—

[Madam Deputy Speaker]

The right hon. Gentleman can try to argue with the Chair for as long as he wishes. I am concerned about keeping good order in this Chamber, and my interpretation of what the right hon. Gentleman said was that it was a serious criticism of the hon. Lady. Perhaps the most subtle thing for him to do is to undertake to tell her that he criticised her on the Floor of the House and apologise for not having given her notice of his intention to do so.

[Mr Kevan Jones]

I have to say, Madam Deputy Speaker, I am not known for my subtlety. I am not sorry. I do not quite understand the point. The point I made was in reference to what has been in the newspapers. I was not criticising the hon. Lady. Frankly, if she is working against the Prime Minister, I would congratulate more than anything, not criticise her. I do not think that it was a criticism—

[Madam Deputy Speaker]

We do not need any more of this. I have said what I have said. It is not for the right hon. Gentleman to argue with me. Will he please now continue with his speech?

[Mr Kevan Jones]

I will, and I will take this up further, Madam Deputy Speaker.

May I now come back to the main points? We are talking about some really serious things, and I am sorry that we have been diverted. As my hon. Friend the Member for Sheffield South East said, if levelling up means anything, it means building up those communities. It is not necessarily about bricks and mortar, but about trying to pull the fabric together.

County Durham has high levels of deprivation, with people more likely to need social care and intervention by the health service at a lower age—in their 50s—than in most places. There are huge demands on adult social care. One thing that makes me very angry is the fact that in the last 10 years, life expectancy in County Durham has actually been falling. The idea that there is a part of this wealthy country where our citizens’ life expectancy is falling is deeply disturbing and wrong.

This brings me to the issue of public health. I give full credit to Amanda Healy, the director of public health in County Durham, and her officers, who have worked tirelessly, and I agree with my hon. Friend the Member for Sheffield South East that if we had given test and trace to them, they would have made a damn sight better job of it than the billions that were wasted nationally. We now have a situation where we have a cut in the public health grant. The last time the Government were consulting on the public health grant, County Durham was going to lose 40% of its funding. The problem is that if we really want to tackle the inequalities, we have to do it in terms of public health. It is no good trying to shy away from that.

We now have a situation whereby, as part of the levelling-up agenda, everything seems to be tied to changing the local government arrangements. County Durham has been offered a county deal. I do not understand why the Government are looking at changing the local government structures of an area—[Interruption.] I am sorry, Madam Deputy Speaker. You are interrupting what I am saying. I can’t hear myself think.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I hope that the right hon. Gentleman will simply withdraw what he has just said.

[Mr Jones]

I will, but it is just irritating, Madam Deputy Speaker.

[Madam Deputy Speaker]

I am sure that it has irritated the right hon. Gentleman, and I am sure that he has never irritated anyone himself. Irritation is something that is allowed in this Chamber; indeed, it is endemic.

[Mr Jones]

I am glad it is, Madam Deputy Speaker.

Turning to the devolution deal, one of the bare minimums that we have looked for is a replacement for the money that we would have received from the European Regional Development Fund. The Government gave a clear pledge that, once we left Europe, that money would be matched, but it is quite clear from looking at the Treasury Red Book that it will not be. That money is important in County Durham because it allows us to fund programmes such as DurhamWorks, which works with young people who want to get into work. It has been a tremendous success, but its funding ends in 2023 and there is no more after that, so it is important that at a bare minimum we get the equivalent of that funding. However, if we have to bid for it, the bidding process will take up the time and effort of our officers, and there is also the question of the transparency of the process.

I will turn now to the White Paper, which I have read. I actually like the Secretary of State; he is a thinker. It was certainly a loss when he was demoted from the post of Justice Secretary, because he had some great ideas around how to reform the justice sector. I plead with him to take some of the ideas in the White Paper, ensure that we have the funding review that has been put alongside it, and stop this nonsense of tying resources to a requirement for devolution or to messing and tinkering around with the governing structures locally. He must then ensure that that system tackles these issues and puts back what is needed in the formula, which is a needs-based assessment.

As I have said, County Durham has more than 900 children in care. That is not cheap and it has led, as my hon. Friend the Member for Sheffield South East said, to adult social care and looked-after children gobbling up nearly 70% of the budget. That is not sustainable over the long term for doing the other things that my right hon. Friend the Member for Knowsley mentioned, when he talked about ensuring that everything else that people expect—parks, services and basic communities—is there.

There is an opportunity here, and one thing we can say about the Secretary of State is that he is a thinker and he wants to drive change. I think he was out of the Chamber when I said that the main themes in the White Paper are correct. It is about not getting bogged down in the detail of governance, deals and devolution that does not actually mean devolution; it is just about trying to get the funding in place.

I have been a leader in local government and also a Minister, and I think that if the Secretary of State looks at some of the innovation taking place in local government, he will see that the quality of some of the officers in local government is fantastic—there are some great people there doing some great things. What we have to do is free up their time, give them credit when they are doing things and support those politicians who are actually there. Let us get away from the idea that mayors are the answer to everything or that these people do not have the responsibility. This issue affected our Government as much as it has affected his. The Treasury just does not trust these people, but frankly it should, because in local government we have some great innovators. We have people who will tackle the real issue, which, as I say, is not just about bricks and mortar; it is about making the real change that happens at a local level.

I wish the Secretary of State well in his ambitions. I hope he has a good fight with the Treasury, to ensure that he gets the resources so that if we are going to make real change at the local level, we will actually make a real difference. We have political differences in this place, but we do actually want what most people want, which is the best for their local community.