Newcastle upon Tyne City Council

Lord Beith Excerpts

Tuesday 8th January 2013 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I am grateful to have this opportunity to discuss what may well be one of the most urgent and pressing issues affecting my city: the budgetary black hole currently faced by Newcastle city council as a result of the reductions in funding received from central Government, alongside ever increasing cost pressures faced by the authority. I am particularly pleased to be joined by my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown), who is keen to contribute to the debate.

Before turning to the effects of the reduction in funding for Newcastle city council, I want briefly to analyse the frankly dire financial position in which the council finds itself. To make up for the significant shortfall in funding that it faces, the local authority anticipates, following analysis by the city treasurer of figures published by Ministers just before Christmas, a shortfall of £100 million over the next three years. So about £39.3 million of the funding black hole is a direct result of reductions in central Government grant funding.

The remainder of the funding gap results from unavoidable cost pressures that the council has to absorb. They include rising costs caused by inflation—of goods and services, heating and electricity—and an ageing population that means that an increasing number of people require support to live independently in the later years. Worryingly, an increasing number of vulnerable children are also being taken into care.

The economic downturn is also having a big impact on the level of income that the council is able to raise from the goods and services that it provides, such as retail lettings and car parking. There is simply less money going round. The council could, of course, have looked to increase council tax to reduce its funding gap, but has decided that that would be the wrong decision at what remains an incredibly difficult economic time for household budgets. I support its decision, for which the Government have made some resources available.

In light of the severity of the situation, the council took the decision to publish a medium-term, three-year indicative budget, believing that an open and honest approach is the best way to ensure that core local services remain affordable and sustainable into the future. However, that three-year budget and the ongoing public consultation on the proposals that it contains have caused significant concern in Newcastle and beyond, as the council has been forced to make difficult, if not impossible, decisions about the services and activities it can simply no longer afford to fund.

Perhaps the most vocal has been the campaign against the council’s proposal to cut, in phases, 100% of its funding to certain local arts organisations, many of which are of national significance. Leading well known Geordies, including Sting, Jimmy Nail, Mark Knopfler and Lee Hall, have publicly castigated the council for the proposal, which would impact heavily on treasured assets such as the Theatre Royal, Northern Stage, Dance City, Live Theatre, the Tyneside cinema and Seven Stories, recently renamed the National Centre for Children’s Books. A campaign is also under way to protect Newcastle city hall—our 85-year-old music venue whose long-term future I genuinely hope can be secured. The council further proposes a 50% cut in funding to Tyne and Wear museums, which will mean a significant reduction for the Discovery museum, the Laing art gallery and the Great North museum.

Nobody needs to persuade me of the importance of any of those institutions to our city. Indeed, they have all played a central role in the remarkable culture-led regeneration that has taken place on Tyneside over the past decade or so under the Labour Government, and many of them mean that creative opportunities and experiences are available to people of all ages in Newcastle that simply did not exist when I was a child. A recent economic impact assessment for NewcastleGateshead Cultural Venues found that for every £1 of public money invested in cultural venues there was a return on investment of £4. These organisations directly employ about 1,000 people and support the local economy, procuring at least two thirds of their goods and services from north-east suppliers.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

I am keen to work with the hon. Lady on trying to persuade the Government that, as with previous Governments, the funding formula is not satisfactory, but she must recognise that other authorities such as Labour Gateshead and Liberal Democrat Northumberland have not slashed 100% of their arts budget or closed their swimming pool.

[Catherine McKinnell]

I am pleased by the right hon. Gentleman’s support. I will go on to address the issue that he raises, because it is a matter of perception that needs to be properly understood.

By significantly improving the quality of people’s lives, these organisations make Newcastle a place in which people want to live, study, work, do business and invest. That is why I am angry about the invidious position in which Newcastle city council now finds itself in being forced to choose between services that make Newcastle the fun, vibrant, economically viable city it is, and services such as protecting the most vulnerable children in our community.

A further vociferous campaign by well known authors has been launched against the council’s proposal to close 10 of its 18 libraries across the city, which for my constituency will mean the branch in Dinnington closing in June this year and those in Newbiggin Hall and Fawdon closing in March 2015. As a mother of two young children, I am all too well aware of the vital role played by local libraries in our communities, whether in encouraging a love of reading, providing a place to study, or offering toy-lending services or access to IT facilities. I am dismayed that the council’s financial situation is so dire that it is closing what, to me, represents part of the great Victorian ideal of municipal service provision—facilities that, once closed, will probably be lost for ever.

Equally saddening are proposals to close City pool by 2016, and in my constituency to reduce funding for Newburn leisure centre while seeking alternative arrangements to manage Outer West pool and Gosforth pool. This scenario is frankly devastating coming just after what must have been Britain’s most successful ever sporting year and a London Olympics that was intended to “inspire a generation”.

Then there are the proposals to cut funding for play and youth services, while a £5 million reduction in funding will, by 2015-16, see the end of Sure Start centre provision in Brunswick, Fawdon, Denton and Westerhope, Lemington, Newbiggin Hall and Newburn—and that is just in my constituency. The importance of Sure Start services in supporting young children and families is absolutely invaluable, and I have serious concerns about the sheer number of places in my constituency that will no longer be able to access such facilities, which have become embedded in local communities.

Possibly of greatest significance in impact on individual lives is the proposed closure of Cheviot View, which opened only in 2008 in Newbiggin Hall to provide overnight residential short-break care for children and young people with disabilities. Many families are extremely concerned about the potential effect on their quality of life if the closure of Cheviot View is to go ahead.

Those are just some of the ways in which cuts to Newcastle city council’s budget will impact on local residents and organisations. Of course, the council is not just reducing front-line services; it is also cutting 1,300 of its remaining 8,000 staff over the next three years. I expect that the Minister will want to characterise these people as “pen-pushers” doing “non-jobs”, but let me assure him that they are not. They are dinner ladies, refuse collectors, people working in children’s services—real people with real lives and real families to support, now looking for work elsewhere at a time when opportunities are pretty scarce.