Local Authorities: Funding

Lord McKenzie of Luton Excerpts

Tuesday 18th November 2014 Lords Chamber

[Baroness Williams of Trafford]

My Lords, zero-hours contracts are not always a bad thing and they suit certain people, but, certainly, anybody who is working for a local authority needs to be on the minimum wage.

[Lord McKenzie of Luton (Lab)]

My Lords, there is a clear pattern here: just yesterday, we had a report from the LSE and the ISER looking at the effects of direct tax benefits and pension changes introduced under this Government. Surprise, surprise: it concluded that the poorest half of the income distribution lost out and the top half gained, and that these changes were regressive. To add to that, the Government have not only imposed the biggest funding reductions in the public sector on local councils—with funding cut by 40% over this Parliament —but they have ensured that those areas with the greatest need are shouldering the largest burdens. The noble Baroness cited some figures, but if one looks at what has happened throughout this Parliament, one sees that spending power—the Government’s favourite measure—has been cut for Liverpool by 27%, for Hackney by 27%, for Manchester by 26% and for Birmingham by 23%. However, lo and behold, for Waverley Borough Council and Wokingham Borough Council it has increased by 1%. If that is fair, what definition of fairness is the Minister using?

[Baroness Williams of Trafford]

My Lords, I take the noble Lord’s point about ring-fenced grants to councils such as Liverpool and Manchester, which lost a lot of theirs. Councils such as Trafford never actually had many ring-fenced grants so they had little to lose in that way. However, that effect has been dampened over the years so that it is not a cliff-like reduction. This Government have a different approach, which tries to rebalance the economy and puts growth at the heart of everything they do, including funding for local areas.