Local Government Finance

Lyn Brown Excerpts

Wednesday 12th February 2014 Commons Chamber

[Lyn Brown (West Ham) (Lab)]

As I spent time contemplating this financial settlement for local government, I was reminded of my recent rereading of that towering classic of Victorian literature, Charles Dickens’ “A Tale of Two Cities”. That is basically what we have here: a tale of two local governments.

For some, it is, relatively speaking, the best of times. The comfortable twin towns of Reigate and Banstead and the wonderful Wokingham have barely been touched by the Secretary of State’s funding scythe. No shadow of Madame Guillotine stalks local government in the home counties. Indeed, as we have heard, some have even seen cumulative growth in spending power per household under this Government.

Local government is the most efficient part of the public sector and it is likely to be commended for its customary ability and experience of doing more with the same resources or the same for less. Innovation and service improvement are in the DNA of local government.

I was a local councillor for 18 years in Newham. We constantly challenged what we did and how we did it, and what we spent our money on. We were aware of the need to get every pound of value out of services, recognising that no service can stand still. We challenged ourselves so that we could direct investment to new priorities. That is the way of all well-managed councils, whatever their political complexion, but these swingeing cuts take councils well beyond the capacity to manage change in such a way.

We heard excellent speeches from my right hon. Friend the Member for Salford and Eccles (Hazel Blears) and my hon. Friends the Members for Blackpool South (Mr Marsden), for Liverpool, Riverside (Mrs Ellman) and for Rochdale (Simon Danczuk) in which they spoke eloquently of the effect of the cuts.

For other parts of local government, the Liverpools, Newcastles, Manchesters and Blackpools—and, indeed, the Newhams and Hackneys—of this world, it is absolutely the worst of times. I must join my colleagues in drawing the attention of the House to the strong correlation between the cumulative level of cuts and deprivation. There is clear evidence that the poorest areas are being hit hardest.

As my hon. Friend the Member for Easington (Grahame M. Morris) elucidated, it is the people in those communities and others like them who are bearing the brunt of the cuts. As we have heard, the 10 most deprived areas will, over this Parliament, have their spending power cut by 10 times the amount that the least deprived areas will. We will see a reduction in or the removal of vital local authority services, putting further pressure on struggling households and families. Hard times indeed.

Increased charges for essential services, the bedroom tax, and the localisation of council tax benefit—for localisation, read cuts—are having an impact on the most vulnerable in our communities. No wonder we see the burgeoning use of food banks, with people driven by desperation, despite the humiliation they feel, to rely on their neighbours for food and sustenance for themselves and their children. That will only get worse, as many are resorting to payday loans as an alternative source of money for food, warmth and rent.

My local authority, Newham, estimates that its real-term cuts will be about 39% between 2010-11 and 2015-16. That represents a cut of £97.6 million, or £300 for every resident. Compare that with a reduction of £16.6 million for Richmond upon Thames, or £88 per head.

It is not just in areas with Labour MPs that that unfairness is played out. Thanks to my right hon. Friend the Member for Southampton, Itchen (Mr Denham), I have been given access to some research carried out by the House of Commons Library. It shows the cumulative reduction over five years for the following Labour-led councils: minus 26.66% for Stockton, minus 23.63% for Broxtowe, minus 19.85% for Norwich and minus 19% for Thurrock. On the other hand, let us look at Surrey Heath, where the reduction is minus 0.75%. In Waverley, it is minus 0.37%. In Elmbridge, it is minus 0.25%. The winner? Epsom and Ewell, with a whopping increase of 3.51% over those five years.

Those local authorities share some characteristics. Not only are they in the least deprived local authority areas, but they are all represented in this place by Cabinet members. Where on earth is the fairness in that? It does not seem to me that we are all in this together. It seems that the Government are shredding the lives and the communities of the most vulnerable, while they make sure that people like them are protected. For shame. For shame. These cuts have a real cost, just as the cuts to the Environment Agency have had a cost. In local government cuts there is a cost to libraries, to looked-after children and to social care, and there will be a cost to an already struggling NHS.

My hon. Friend the Member for Rochdale (Simon Danczuk) in his super speech and my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) spoke eloquently about the fact that this is the year the Government have decided not to provide a dedicated resource to take the very poorest out of council tax liability. In the first six months of this financial year, 670,000 people faced bailiffs. What is the biggest calumny in this? The Government use the stick of non-collection of council tax from those low-waged council tax payers to beat the councils with. It is not Dickensian, it is Orwellian.

We can see from this local government settlement that the whole ethos of local government funding has shifted away from need. Those councils most dependent on Government funding, those with the lowest council tax base, those that are most deprived, are the ones that are being hit hardest. Councils for wealthier areas, unsurprisingly, have a larger council tax base, further insulating them from the chill experienced elsewhere.

This is a callous, cruel, short-sighted and just plain wrong approach. I cannot envisage a worse approach. It is another example of the Government balancing the books on the backs of the poor. But along with the charge of unfairness, along with the charge of partisan government, must come the charge of indifference. As my hon. Friend the Member for Sheffield South East (Mr Betts) said in his excellent speech, the autumn statement was late. The provisional local government settlement announcement was late, as was the council tax referendum limit announcement. How can the Government not understand that their dilatory complacency makes it so much harder for councils to plan for the excessive cuts that the Government have imposed? This settlement is wrong and it is callous. It takes money from poor areas and distributes it to those who are not in such need. I urge my hon. Friends and others in the Chamber who cannot accept the Government’s unfair settlement to join me in voting against it.