Local Government Financing
Debate between Lord Beamish and Mark Pawsey
Mark Pawsey (Rugby) (Con)
It is a great pleasure to follow the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) and to be in the Chamber for the maiden speeches of my hon. Friends the Members for Dudley South (Chris Kelly) and for Wolverhampton South West (Paul Uppal). Their speeches distinguished themselves from those of the Opposition, who seem to be seeking to renew some of the battles of the past 13 years, and seem to have failed to recognise that the world has moved on.
It is appropriate that we are discussing local government funding in the context of the Budget debate of the past few days, which, it is important to remember, was an emergency Budget debate that arose as a consequence of the severity of the economic position in which the country finds itself—even worse than was expected. I want to consider why the local government funding debate is necessary and what other sectors have done already, and I want to put in perspective what local government is being asked to do and how it may do it. It is entirely appropriate that local government should make its contribution to tackling the budget deficit. Labour has left behind one of the largest budget deficits in Europe, and we are borrowing one pound for every four that we spend, increasing our national debt by £3 billion a week. The crisis in the eurozone shows that the consequences of not acting are severe, in terms of higher interest rates, sharper rises in unemployment and potentially even the end of the recovery. Those issues are recognised in the country.
It is now seven days since my right hon. Friend the Chancellor stood at the Dispatch Box and gave his Budget statement. As a new Member, I have had to come to terms with the massive amount of e-mail and letters that Members receive. On the Budget, I have had plenty of correspondence—from think-tanks and lobby groups—but since last Tuesday I have had very little from the electors in my Rugby constituency. The reason is that there was little in the Budget that electors were concerned about or surprised about—despite the protests of Labour Members, who do not want to hear about the true state of the public finances. The people in the country understand and support the measures that we need to take. These measures are necessary as a result of past mistakes, and the coalition Government have been forced to take strong and decisive action to sort out the deficit and ensure that confidence is not lost in UK markets. The public understand that the action being taken is unavoidable and that Britain must build a new economic model founded on the principles of freedom, fairness and responsibility.
The private sector has already borne the brunt of the recession, and it is important that this responsibility is shared by all of us. The private sector endured job losses and business closures during the dying days of the previous Government. Businesses have been forced to make savings, to cut back and to make redundancies, so it is only right that this pain is shared by all, because we are all in it together.[Laughter.]
I ran a business for 25 years, and I know that no matter how tightly run an organisation is, there are always additional cost savings that can be made. Here we are looking at additional cost savings of between 1% and 2%; they are there if people look hard enough. It is interesting that the Local Government Association briefing document issued today makes
“a comprehensive and open offer to Government to work with them to… reform the state to achieve the required savings”.
That shows that there is clear acceptance of the need for savings and a desire to get on with them.
There are many examples of current public sector waste. The Minister told us about some of them earlier when he spoke about tranquillity rooms, cappuccino machines and Pravda-style magazines. An article in The Sunday Times of 13 June showed that local government still “doesn’t get it”, as it is advertising well-paid non-jobs. Brighton and Hove city council is recruiting four new “strategic directors” on £125,000 each; their job is to “look outwards”. An “internal communications change consultant”, the article also mentioned, is being recruited in Sheffield at a cost of between £380 and £400 a day. A “community development co-ordinator” in east London—
Mr Kevan Jones
I am fascinated by the hon. Gentleman’s examples, but should he not be telling members of his own party in local government to practise what they preach, as most of the councils concerned are Tory and Liberal Democrat councils?
Mark Pawsey
The message is going out loud and clear: this kind of waste cannot go on and should not happen. It is entirely right for the Government to conduct a full review of local government finance and right that that review should restore to our councils a general power of competence. For far too long, councils have been dictated to by central Government. Reference has already been made to the estimate that only 5% of local government spending is controlled by elected councils. That means that of the £7,000 a head spent on local public services, only £350 is under local democratic control.
I was a councillor for five years, and in that time I became increasingly frustrated with Government interference, much of which prevent my colleagues and me from doing our job. It is for that reason that local government has often been described as a delivery arm of central Government. We often took decisions not because they were the right ones for our community, but because the Government had told us that that was what they wanted us to do and they applied pressure through directives, centrally set targets, inspection regimes and the final sanction of taking away grants. It is refreshing for all involved in local government—both officers and councillors—that the coalition Government plans set out to provide councils with the freedom and the resources to concentrate on local priorities and deliver front-line services by stopping the ring-fencing of central Government grants.