Local Government Finance

Louise Ellman Excerpts

Wednesday 12th February 2014 Commons Chamber

[Brandon Lewis]

I thank my hon. Friend for that, and I know she is rightly fighting hard for her area. As the Prime Minister said today, we must make sure that we do all that we can to ensure that areas have everything they need in this situation, and I will discuss flooding in a few moments.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

On the Government’s own figures, Liverpool has the highest level of deprivation in the country, yet it has an entrepreneurial council that is working hard to back business and support jobs. In those circumstances, with the council showing so much initiative against a background of such adversity, why has Liverpool suffered the greatest cuts of all local authorities in the country?

[Brandon Lewis]

Actually, it has not. A council that has some of the greatest cuts is my own local authority in Great Yarmouth, which was left a black hole by the last Labour Government through the working neighbourhoods fund. I gently say to the hon. Lady that she might want to remind Mayor Anderson that Liverpool’s authority has £116 million in reserve, one of the highest spending powers in the country in the first place, a regional growth fund and a city deal. This Government are working with such local authorities.

--- Later in debate ---

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Local government is important to everyone. It is about improving people’s quality of life, developing potential, protecting the vulnerable and supporting communities. That is why the Government’s attacks on local services are so destructive. When the severest financial cuts are made on the poorest, that is grossly irresponsible. I listened with horror to what the Chairman of the Select Committee told us: the Government have now admitted that they are no longer concerned about protecting the vulnerable and are more interested in protecting the rich—that is outrageous.

It is completely unacceptable that Liverpool, which on the Government’s own figures is the most deprived local authority in the country, has suffered the deepest cuts yet again. Liverpool will suffer drastic cuts in spending power this year and it will suffer them again next year, with its funding slashed by another 5.4%—£32 million—which is the equivalent of £148 a household. By contrast, Surrey Heath is facing cuts of £73,000—a mere 0.1% cut. That is an indication of where the Government’s priorities lie. In real terms, Liverpool’s funding has been cut by 52% since 2010, and the figure is likely to reach 58% by 2016-17. As 76% of Liverpool’s finance for local services comes from central Government, in recognition of the city’s needs, the cut will be devastating.

I was appalled to hear the Minister state at the beginning of this debate that he regarded that support as a handout. I call it justice; it is about recognising need. He sees supporting deprived communities as giving a handout, which he is rapidly withdrawing. It is an absolute disgrace, and I am pleased that he has put that on the record in this debate today. The reality for Liverpool is that services such as nurseries, care for the under-fives, social care for the vulnerable, which includes 5,000 care packages, library, regeneration and youth services will all be at risk. Whatever spurious lines he tries to go down, the finger of blame will be pointed clearly at the Government who will be responsible.

I noted that the Minister attempted to divert this debate by talking about Liverpool’s reserves. Those reserves are held because they are legally required to be held, mainly on behalf of schools. Furthermore, despite the devastating blows to local services coming from this Government to the city of Liverpool, the council and its mayor are responsible people and they are determined to maintain the city’s finances in a prudent manner, and they will not deviate from that.

[Andy Sawford]

My hon. Friend makes an incredibly important point about Liverpool’s reserves, which we calculate are equivalent to one month’s operating costs for Liverpool council. That is a prudent level of reserves. Perhaps, it wants more reserves in order to have some sustainability given the context that she is powerfully describing.

--- Later in debate ---

[Mrs Ellman]

My hon. Friend makes an extremely important point. Nothing that the Minister has said tonight can deviate from the reality that the Government are hitting hardest the poorest areas of the country. They describe the funding that they give as a handout, and they are shameless in their intention to continue hammering the poorest areas of the country. It is absolutely outrageous and absolutely unacceptable. Of course, the cuts in local government support to Liverpool are not the only blows being dealt to the city. For example, the hated bedroom tax is already affecting more than 11,000 Liverpool households, which are losing an average of £14 a week. That combined with the additional council tax charges that the poorest people are being required to pay means that a large number of people are now being asked to pay £16 a week more. That might not sound much to a millionaire or to people who are extremely wealthy, but for a poor person in work struggling to survive on a low wage and to maintain their family, this is an additional hammer blow, which is unacceptable and disgraceful. One consequence is increasing debt for vulnerable people, and that is something about which the Government should be concerned. Instead, they seem to have washed their hands of it and simply do not care.

I have described the current situation in Liverpool in relation to previous revenue support grant settlements and to what is going to happen in the coming two years. It is all credit to the city of Liverpool, its elected council and elected mayor, that the city is resilient. It is fighting hard to support jobs, back enterprise and bring investment to the city. For example, the mayor has already restored the cruise liner terminal. The council promotes investment worth millions of pounds. It is about to host the international festival for business on behalf of the United Kingdom. It is delivering apprenticeships and it has protected people from the impact of Government cuts. However, this settlement makes that task harder; indeed it might even make it impossible. The people of Liverpool know what is happening and who is to blame. Even at this late hour, I ask the Government to think again about the unfair cuts they are inflicting on the people of Liverpool and treat Liverpool citizens with the respect they deserve.