Local Government Funding
Debate between Lyn Brown and Gordon Marsden
Mr Marsden
I would like to make a little progress before giving way. As I was saying, the regional development agencies provided a significant benefit.
What has happened since June this year? First, we had the area-based grants cuts in the emergency Budget. If we look at the figures on the cuts in seaside and coastal towns generally, and particularly at those in Blackpool, we find that in most cases the cuts were twice the level of those made in other areas. It is not necessary to take just my word for it; let me cite the words of Peter Callow, the leader of Conservative-controlled Blackpool council. On Radio Lancashire, commenting on the cuts, he said that
“it is 33 million for a part year remember which equates to £4 million for the whole year, that is a sizeable sum and what I have got to explain to government and what I am doing is saying look behind the glitz and the glamour of Blackpool there is deprivation, we are one of the most deprived areas in the land and we shouldn’t be singled out like this, I understand some of the leafy lanes of Surrey and places have got away with it, well that can’t be right”.
That is what the leader of our Conservative-controlled council said back in June.
Lyn Brown
I am interested in the point my hon. Friend is developing. I understand that Newham council is likely to lose approximately £70 million over three years. Newham, as my hon. Friend will know, has the sixth highest level of deprivation in the country. Richmond, on the other hand—I am sure we all who know who represents that constituency—is to lose only about 9% of its net grant, which amounts to only £4.6 million.
Mr Marsden
I am grateful for that intervention, in which my hon. Friend highlights the disparities that can arise between two boroughs in a relatively small geographical area in London. Those disparities, of course, have been reflected elsewhere. Blackpool had the cuts I mentioned, for example. Then we had the spending review.
I see in his place the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill). When he was tackled on these issues during questions immediately following the spending review, he came up with the immortal phrase:
“Those in greatest need ultimately bear the burden of paying off the debt which this country has been left”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]
If there were ever a Freudian slip to demonstrate the position of Conservative Members, who want to punish deprived areas for the problems they face, that was it.
Mr Marsden
I am indebted to my hon. Friend. He is, of course, absolutely right.
Mr Marsden
My hon. Friend is absolutely right. In common with many other seaside and coastal towns, Blackpool has a lot of small businesses and micro-businesses, and they are precisely the kind of businesses that benefited from the application of the working neighbourhoods fund and who are now suffering as a result of its potential withdrawal.
I want to talk about the situation in Blackpool as it is now. My local authority has told me that, on the basis of a 16% cut, it is looking for cuts of £32 million in its overall budget. Unsurprisingly, that led the leader of Blackpool council to write to the Secretary of State—he has been having quite a sustained correspondence with the Secretary of State, but without a great deal of success. On 6 October he said that he had written in June to highlight the disproportionate impact that the first tranche of funding cuts was having on a needy and deprived local authority and to make a plea that the autumn comprehensive spending review considered a more equitable sharing of any other pain. It did not do that, of course, and he then felt constrained to write again on 5 November saying that his assessment and that of many of his colleagues is that the front loading of formula grant cuts will have an adverse effect of between 12% to 16% next year, which is very significant. He said that there was the anticipation of major job losses in 2011-12 alone and that for a town like Blackpool, where nearly 30% of the working population are currently employed by the public sector and which has seen a 91% increase in JSA over the last two years, such a radical step reduction in central funding would have a catastrophic effect on the local economy. He said that he fully understood the need to reduce the overall deficit over the four-year period but he urged the Government to reconsider their approach prior to the announcement of that provisional settlement in early December.
That is also what all my party colleagues are urging. We are not suggesting that the Secretary of State has a magic wand he can wave to solve all the problems—not that I have ever seen him in Christmas panto. Rather, we are talking about sensible settlements.
We are also talking about the cumulative effect of what this Government have done, because it is not just about the cuts in the working neighbourhoods fund or local government cuts. It is also about what is being done in respect of education maintenance allowances. Some 2,500 young people in Blackpool are now going to be deprived. I went to my sixth-form college last week, where I met the brightest group of first-year sixth formers—all of them girls, incidentally. I have been meeting them for some time. They were all full of enthusiasm for where they were going, and they had all come through the Aimhigher programme. They were also all—bar one, I think—in receipt of EMA, and, of course, they were the last cohort to be receiving that. We are therefore talking about this whole conglomeration of subjects.
The fact is that, even if the Secretary of State believes he has made a significant impact on the current situation, that is not what the journalists are saying. On 25 November, the Local Government Chronicle said that the Secretary of State
“has been rebuffed in a last-ditch plea to the Treasury for funding...Sources close to chief secretary to the Treasury Danny Alexander”—
who was obviously not singing from the same hymn sheet as the Secretary of State today—
“confirmed that the Secretary of State made an unsuccessful plea for more cash earlier this month to mitigate the impact of front-loaded local government cuts.”
The Secretary of State was singing a cheerful song today, but whether he was whistling to keep his spirits up, we will wait to see with the local government settlement.
When we move aside all the statistics, we are talking about the impact of real cuts on real people. I want to conclude by sharing with the House the account of a visit I made to a project in the summer. It is a community garden in a very deprived area in the centre of Blackpool. Everybody had worked hard on it, but the efforts had been co-ordinated by a woman from the council who had worked with the police community support officers and the residents association. The mayor attended, and we all had a wonderful afternoon. At the end the woman from the council came forward and said a few things, and we were then all told to put our hands together and give her a big round of applause because it was her last day. Why was it her last day? It was her last day because she was one of the people losing their job under the area-based grants cut that this Government have brought forward. I do not want—and I am sure many other Members do not want this either—to spend the next 12 months going around my constituency from worthy project to worthy project having similar experiences. Therefore, despite the philosophical and ideological differences between the Government and Opposition Members, I urge the Government to think again. They should look again at the disproportionate effect these policies are having on some of our most deprived communities.