Lord Barwell
Main Page: Lord Barwell (Conservative - Life peer)
Mr Denham
If I may, I will just complete the point I was making by giving one last example.
We were told that there would be a 2% limit on cuts; however, Corby council faces a cut of 15% in one year, because the figures did not include the housing and planning delivery grant. Corby council did the right thing: it gave planning permission for houses and economic development—and now it has had to pay for that with a 15% cut. I now give way to the hon. Member for Croydon Central.
Gavin Barwell
I am very grateful to the right hon. Gentleman for giving way. He is trying to make the point that the previous Government allocated money on the basis of need. Does he recognise that the result of the introduction in 2006-07 of the fourth block into the funding formula, according to the London Councils report, has been a shift in local authority funding
“from a relative needs basis towards a per capita basis, causing an arbitrary redistribution in funding between high-need and low-need authorities”?
That is the result of the policies his Government introduced, and he did nothing to correct those decisions.
Grant Shapps
I think that it would be only right to invite people to come and try out the tranquillity room. It was paid for with the hard-earned money of the people outside the House, when the previous Government seemed to think that it was a good idea to spend hard-earned taxpayers’ money on building tranquillity rooms and putting in expensive sofas. This is an indication of how they talked about helping the poor when they were really helping themselves by refurbishing their offices with bizarre and extraordinary furniture.
Gavin Barwell
Has my right hon. Friend been able to ascertain whether the room was given ministerial approval and, if so, which Minister gave that approval?
Grant Shapps
I cannot tell my hon. Friend how the approval process used to work, but I can tell him that, in the new Department for Communities and Local Government, that kind of expenditure would never be signed off without someone political taking the decision right from the outset.
We have announced that we will move away from the wasteful inefficiency of central targets and towards incentives involving more carrot and much less stick. Last week, we scrapped the comprehensive area assessment, saving the taxpayer £39 million.
Alison McGovern
It would not be able to do it. Travel-to-work distances are a problem in Wirral—compared with, say, south-east England—and we simply do not have adequate connectivity to centres of employment such as Manchester, Warrington and the north Wales coast. The RDA was doing fantastic work in addressing that connectivity problem, working hand in hand with local authorities. I do not think that the Government fully understand those practices.
Certain ideologies in the Government are driving the cuts. The first is that less government is better. Conservative and Liberal Democrat Members might say that, but I believe—please forgive the truism—that better government is better. This is not the time for the state to withdraw entirely. Secondly, the Government believe that pure deficit reduction is all that matters, and that reducing the deficit will itself drive growth if we demonstrate to the City and the markets that we are being tough. I do not think that there is any evidence for that. I am a great believer in evidence-based policy making, and I would like to see some evidence for that.
Gavin Barwell
The hon. Lady asks for evidence: a report from Goldman Sachs looks at every fiscal correction in major world economies since 1975 and shows that those based on reductions in spending work and actually boost growth.
Alison McGovern
I always look carefully at reports from the likes of Goldman Sachs, PWC and others—and one thing that being a local councillor taught me was never to believe at first glance what the consultants say. However, I will certainly look into the report that the hon. Gentleman mentions. I have an open mind.
The Government want us to believe that there is no alternative. I have mentioned already that Labour’s Budget in March detailed much that we could do to find efficiencies, and talked about many of the things that we have heard from the Government. The question is not about reducing the deficit: it is about the timing and the manner in which it is done. I can only hope that my words today will make the Government realise some of the impact that their actions will have on my constituents in Wirral.
Gavin Barwell (Croydon Central) (Con)
I will try to limit the length of my remarks to five minutes so as to allow others to speak.
The shadow Secretary of State set the tone for the debate. There was some good knockabout, but one got the impression that he does not actually understand the system that he was administering until very recently, and he had nothing to say about the fundamental problems with local government finance in this country. The reality is that councils are too dependent on central Government for their funding, and too much of the money that they get from central Government is controlled by central Government in respect of how they can spend it. Also, the grants system that is used to distribute money is hugely complex, not transparent, unpredictable and unfair.
Let me give an example involving my own local authority. In this financial year, Dorset county council received the largest increase in the country: 7.1%. The England average was 2.6%, and Croydon got 1.5%. I will not take up time by going back over the past four or five years, but the pattern is repeated. Has Croydon suddenly lost a large chunk of population, or are we suddenly a much more affluent place than we were a few years ago? No. The system makes no sense whatever.
The London borough that is most similar to us is Enfield. It receives £423 per head of population, whereas Croydon receives £348. If we received the same level of funding as the borough that is most like us, we could cut council tax bills by £200 per head. In London, we have the nonsense of the area cost adjustment that divides London up into three areas and pretends that the London borough of Croydon can pay people a lot less than the London borough of Sutton right next door. That is complete nonsense. The system is in urgent need of reform, yet we have heard nothing from the Opposition about any of these issues.
On savings, let me repeat something that I said in the Budget debate. Almost every Labour Member who has contributed today has said that we are driven by some kind of ideological passion to slash public services. The NHS saved my life when I was seven years old and had lymphatic cancer, and I also have two sons at state school. The most urgent issues in my constituency are the need for more police officers on the streets and the need to do a better job of repairing our roads. I did not come to this place to slash public services, but I and my constituents know that the Government cannot continue to spend money that they do not have. That does not work in the long term.
There is real scope for making savings in local government—my council saved 6.8% in the previous financial year—but there is no doubt that the level of savings envisaged over the course of this Parliament is significant and will lead to some really tough decisions for local authorities across the country. I have to say to Opposition Members that although the Chancellor has proposed going further than the Labour party was proposing, we are protecting fewer departmental budgets so in terms of the unprotected Departments there is actually very little difference between the plans. People who have sat here listening to the debate all day, as I have, would not have got that impression, however.
May I end by making a few pleas to my Front-Bench colleagues? They can do a number of things to make this situation easier for local authorities. First, they can press forward with the proposal for a general power of competence. In London, we used to have a mutual arrangement between the borough councils to buy insurance, but it was ruled to be illegal. Bulk purchasing of that kind can save local authorities sizeable amounts of money. I also agree, actually, with something that was said by the Opposition about the Total Place initiative. Croydon was a pilot for early years, to which a lot of bureaucracy is attached. There is real potential to drive up savings over the long term in that regard.
Finally, I ask that we look at the possibility of working across the public sector. In Croydon we have a PCT that is coterminous with the council. There are separate finance directors, separate human resources departments, separate properties. If we can bring the different bits of the public sector together, there is huge potential for saving money and protecting our front-line services.
There is so much more that I could have said, but other Members want to speak so I will take my seat.