Local Government Finance (England)
Debate between Lord Beamish and Clive Betts(11 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Betts
There are lots of factors that have been put into the formula in the past. We can all make arguments about the details. For example, it is more expensive to provide services in Sheffield because of its topography. We have hills, so construction costs, such as for the tram, go up. But on the index of deprivation, the most deprived areas will get the biggest cuts. There is no argument about that—if there were, Ministers would be jumping up to the Dispatch Box to deny it.
The Secretary of State says, “It is all right, councils have got reserves. There is no need for cuts.” That is not true. Yes, Sheffield has around £150 million of reserves, but more than £25 million of it is held for schools, and it cannot spend that; £25 million is in the housing account, ring-fenced and dedicated; some £50 million is to be allocated for capital projects; and then there is the money that has to be used to match-fund a PFI scheme that the Government have just approved—I give credit to them for taking forward that Labour scheme. That leaves around £11 million of reserves, and it would be folly for the council to put that money into services next year and leave itself with no reserves. So the council is being prudent and appropriate, as are most councils, in how it deals with that issue.
Mr Kevan Jones
Does my hon. Friend agree that there is a sleight of hand in things like the new homes bonus? The Government are giving with one hand and taking away with the other. Newcastle, for example, will get £6 million for 2018-19, but will lose nearly £17 million. The 12 councils in the north-east will lose some £275 million over the period.
Mr Betts
There are smoke and mirrors all over the place. Ministers talk about the new homes bonus as if it were new money as well as new homes. It is not: it is top-sliced from the grant. In Sheffield’s case, the figures are very stark. For every 55p the council gets from the new homes bonus, it would have received £1 if the money had been allocated through the grants system. It is not that Sheffield does not want to build new homes. There is a reason. The market is flat in the private sector, the money for housing associations comes through the Homes and Communities Agency and the money for council housing is not there because the Government have capped the amount councils can spend from the housing revenue account. That is why not so many new homes are being built in Sheffield—it is not through want of trying or want of effort on the part of the council.
I note that the council was blamed by the Deputy Prime Minister the other day when he said that it was cutting front-line services. Yes, it is. There is a proposal to close the Don Valley stadium where Jessica Ennis trained because there is not enough money to keep it going. There are cuts to early-years provision because the council has lost more than £6 million in grant directly, so it cannot be kept going. There are cuts to the eligibility criteria for adult social care.
The Deputy Prime Minister ridiculed the council for cuts to libraries. What the council is doing is a very detailed and proper consultation, recognising that it simply cannot afford to keep libraries going in the way they were funded in the past. It is looking at 10 different models from 10 different authorities across the country. Those are out for public consultation on the different ways of doing things. That is a responsible way to try to approach a very difficult situation.
The council was also ridiculed by the Deputy Prime Minister for spending £2 million on council meeting rooms. No, it has not done so. It has had to make some essential repairs to a grade 1 listed building, the town hall, and it is putting money into reorganising the council accommodation to save £30 million in running costs over a 10-year period. It is not just Labour-controlled Sheffield that is doing that; many councils up and down the country and of all political persuasions are approaching things responsibly in that sort of way.
The Government should listen to the siren voices—Sir Merrick Cockell, Baroness Eaton, the leader of Kent county council. These are not just siren voices, but voices of reason. The graph of doom, whether it comes from Birmingham, Barnet or Sheffield, is a reality. The reality is that if we keep on cutting council funding and the demand for social care goes up, other council services are going to get squeezed out of existence.
Ministers are fond of saying that localism is not just about councils. No, it is not; it is about communities as well. At the end of the day, these cuts are not going to hit councils; they are going to hit communities, and they are going to hit the most deprived communities hardest. When the public, already sceptical, see these cuts become a reality, the anger against this Government will grow considerably in the coming months.
Local Government Finance
Debate between Lord Beamish and Clive Betts(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Local Government Finance Bill
Debate between Lord Beamish and Clive Betts(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Betts
Absolutely. We are told that vulnerable people—perhaps people on very low incomes with children—are going to be protected, or have to be protected, by councils under the scheme, but are they going to be or not? Are the Government going to insist on that? We are not quite sure. We are told that local authorities have to take account of the tapers under universal credit, but what does that mean? Are they obliged to respect completely the 65% taper element within universal credit or not? If so, will that mean that a smaller and smaller number of people will have the totality of the cuts in benefits imposed on them? That is the reality. Will the Government explain what they think is going to happen?
Mr Kevan Jones
Does my hon. Friend agree that one problem that the Government seem to ignore is that a lot of the people affected will not be on benefits but will be in low-paid work and that this will be a disincentive for them to work?
Mr Betts
Of course it will, unless the Government are saying that those people should be exempt as well. To what extent will councils be obliged to take account of the tapers in universal credit in the system they devise? Will Ministers give a clear answer on that? If councils have to take account of it, full stop, that will really throw the onus back on attacking benefits and on reductions for the unemployed. Is that the situation? Is that what Ministers are trying to achieve?
The LGA has done some calculations to the best of its knowledge and information. It says that because of the exemptions for pensioners and others for whom the Government say local authorities cannot make reductions under the scheme, those who are left whose benefits can be reduced—the 1.3 million claimants out of the 5 million who currently claim—will lose, on average, £320 each a year. That is £6 a week being lost by people who are already on low incomes—that is why they are claiming benefits in the first place. That will be on top of any other benefit losses from any other benefit reductions the Government intend. Have the Government analysed whether that £320 figure is right? Do they contest it?