Local Government Finance (England)

Kevin Hollinrake Excerpts

Wednesday 10th February 2016 Commons Chamber

[Dr Blackman-Woods]

I am not going to give way to the hon. Gentleman, because he would not take an intervention from me.

The only north-east council to benefit from the £150 million additional funding announced on Monday is Northumberland. That is staggering, especially as Durham is also a substantially rural area. It is odd, then, that Northumberland is the only council to benefit from the rural fund. Indeed, if we look across the country, the areas to benefit most are Surrey, with £11.9 million; Hampshire, with £9.4 million; North Yorkshire, with £9.2 million; and Devon, with £8.3 million. Examples of the reduction in core spending tell a similar story: Durham had a reduction of minus 4.1%; Newcastle minus 4.4%; and Sunderland minus 4.3%. Compare that with Surrey, which has a decrease of only minus 1.1% and North Yorkshire minus 0.3%.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Will the hon. Lady give way?

[Dr Blackman-Woods]

I will not give way to the hon. Gentleman, just because we are very short of time.

It is very clear from those figures that shire county areas and southern authorities have received below-average reductions in core spending power, while deprived areas have received above-average decreases, continuing the unfair trend set by the coalition Government. As we have heard from other Labour Members, the very councils suffering the highest cuts have a higher demand for children’s services, evidenced by severe cuts to our children’s centres, with most closed under this Government, and greater demand for adult social care and higher levels of need for good public health. That is not, however, reflected in core spending power per dwelling. The average across the country is £1,838, but for Durham, an area of high disadvantage, it is only £1,608. By comparison, the whole of Surrey gets more than £2,000 per dwelling, while Richmond upon Thames receives £1,866. Based on current forecasts, Durham’s total savings target for the next four years is £105 million, so there will have been £260 million of cuts since austerity began—figures so large that they are difficult to comprehend.

Figures are important to understanding the gross unfairness in Government funding, but we need to take a moment to consider what this means for people who need council services. Even by dipping into council reserves, Durham faces severe challenges with regard to social care charges, the provision of essential youth services and support for vital bus services. I say to the hon. Member for Beverley and Holderness (Graham Stuart) that Durham is a rural area, too. It needs to support its bus services, but the Government are not allowing for that in the current formula, not to mention any access to leisure facilities.

The council will do its best to ensure that the most vulnerable people are protected and that, where it can, capital will be used to promote economic growth and tourism, but the Government should take no comfort from that. The statement on Monday was a disgrace in that it failed to address the needs of some of the most disadvantaged people in the country. The settlement leads to the extraordinary position whereby residents in more affluent areas are receiving services of higher standards and greater volume than in areas where a lot of the people are low waged or where historically they have high levels of poor health. That cannot be fair and no amount of loquaciousness and tongue twisting from Government Members will make it so. It is time for a fair local government finance settlement based on need, not the political colour of the local authority.

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[Kevin Hollinrake (Thirsk and Malton) (Con)]

I warmly welcome this statement today from the Secretary of State. My local authority, North Yorkshire County Council, will receive £15 million in transitional funding over the next two years, and my district authorities will receive £1.4 million. We hear cries of “Tory plot” from the Opposition, but my local authority was facing a 37% reduction in its funding, compared with an average of 20% for metropolitan authorities. What kind of Tory plot is that? This is about fairness.

[John Stevenson (Carlisle) (Con)]

Does my hon. Friend also welcome the news that Labour-run Carlisle and Labour-run Cumbria are also receiving some transitional relief?

[Kevin Hollinrake]

I do welcome that news.

This funding is targeted at the locations with the biggest falls. Opposition Members need to understand the profound feeling of unfairness that exists in my community, not just about funding for rural services but about the way in which our schools and healthcare are funded. How would they explain to an elderly constituent of mine in need of adult social care why she should get less funding than somebody in an urban area when she pays more in council tax? Why is that right? The right hon. Member for Birmingham, Hodge Hill (Liam Byrne) mentioned disadvantage, but a band D council taxpayer in my area pays £1,472 a year, which is £200 more than someone in his constituency.

These are deep cuts for the people we need to protect in our communities, whether they affect our libraries, our bus services, our post offices or those in our voluntary sector who do such fine work but who rely on central moneys to pay for the car schemes, the home visits, the day care and the relief care. I therefore welcome the fair funding review that the Secretary of State has announced. We just want fairness. We do not want a better deal than urban areas; we just want a fair deal, and whatever deal is arrived at needs to be baked into the system.

Historically, underfunding by successive Governments has led to our paying more in council tax and to our homes being more expensive to buy or to rent and more expensive to heat. Among the elderly population in my constituency, the numbers are rising three times faster than those in metropolitan areas, and the cost of providing services to those people is much more expensive. The Government recognised that in 2013-14, but we only got 25% of the funding that we were due, owing to damping.

What we need is a simple, transparent system that recognises need. Whatever that system might be, if it is fair Conservative Members will sign up to it without question. None of us is complaining about the size of the cake; we just want a fair distribution. We realise that we need to make cuts. Every time we have one of these debates, Opposition Members refuse to say where they would make such cuts. They are deficit deniers. We need to make cuts in our area. Our local authorities need to become more efficient.

In my area, we have eight separate local authorities. That cannot be right at a time when we are having to make deep cuts, and we need to look for efficiencies. That cannot be an efficient way to run local government. Local authorities have a part to play in this, and we have a chance to reorganise as part of the devolution revolution. We have a complex system with five clinical commissioning groups, five health trusts, eight local authorities and a huge number of voluntary organisations. If we are to make the best of the money available and balance the books, local government will of course have to play its part if we are to become more efficient. We need to bring together all our services, such as health, social care, housing and education, to ensure that they are interconnected and that they work more effectively without duplication, complexity or bureaucracy. This settlement gives us the breathing space to develop a new fairer funding formula—a simple, fair, future-proof and rural-proof formula—and I am very happy to support the motion.