Funding for Local Authorities

Debate between Mike Thornton and Daniel Kawczynski

Thursday 10th October 2013 Commons Chamber

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I remember clearly in 2004 when Carolyn Downs, the then chief executive of Shropshire council, presided over an increase in council tax of 16.6% when the council was controlled by Labour and the Liberal Democrats. Carolyn Downs has gone on to be chief executive of the Local Government Association, but when she was the chief executive of the council her salary was £160,000. I make that point at the outset because I feel strongly that we need to get back to a system in local government in which there is close scrutiny and checks of individuals’ salaries. A salary of £160,000 for chief executives was unacceptable. There was a massive number of managers involved, and I would go so far as to say that there was a certain amount of empire building. We have to get back to ensuring that the money spent goes directly on providing services.

I am extremely pleased that the Secretary of State, the Department and the Minister have encouraged councils to freeze their council tax and to try to reduce the bloated bureaucracy and excess management in local government. Now we are implementing a certain number of cuts, but when we are back to full prosperity, the economy is growing and the country is doing well, I hope we will not go back, having the comfort of economic prosperity, to the bad old days under Labour, when money was poured into local councils without some form of evaluation and critique of how that money is spent and without ensuring that councils are run like efficient businesses, as other sectors of the economy must be.

[Mike Thornton (Eastleigh) (LD)]

I am surprised that my hon. Friend implies that local councils are over-bureaucratic. I know that I am new to the House, but before that I was a councillor in my borough, where I found that everything was run far more efficiently, far more quickly and far less costly than everything run around here. If the Minister would like to visit Eastleigh borough council to see how to run something efficiently, he would be extremely welcome. Perhaps we should return business rates to the control of local district councils, where the money would be used far more efficiently, effectively and quickly than it would if it was left to bob back and forth to London.

[Daniel Kawczynski]

I am grateful to my hon. Friend, because he leads me succinctly to my next point, which has already been made. An ICM survey has revealed today that six out of 10 people think services are better now than they were in 2008. That raises the following question: how is it possible that the majority of people in the United Kingdom think that services are better today than they were five years ago, when massive amounts of funding were going to local government? I will outline the situation in Shropshire later in my speech, but we must not forget that important survey finding.

I congratulate my hon. Friend the Member for Tiverton and Honiton (Neil Parish) on securing the debate and agree with him wholeheartedly. I would like the Minister to take away our message that more needs to be given to rural authorities. The cost of providing services is massively greater in rural areas than it is in cities and inner-city areas. I have made that point repeatedly to the Prime Minister, because it is something I am passionate about.

My No. 1 pledge to my constituents at the last general election was to try to get the funding formula for education provision changed. Shrewsbury receives £4,200 per child each year for their schooling. Other parts of the country get £7,000, £8,000 or £9,000. Of course we understand that children in very deprived inner-city areas might need a little more than we get in Shrewsbury, but not double. It is completely unacceptable in this day and age to have such discrimination against children in one part of the country. They are receiving less than half what children in other parts get. There are schools in my constituency that have nothing like the facilities that schools in inner-city areas have. There are leaking roofs, problems with insulation and all sorts of other problems, which I think is absolutely disgraceful. I will not stop until the funding mechanism is changed and children in Shrewsbury get a fairer deal.

I pay tribute to the leader of Shropshire council, Mr Keith Barrow, who has managed to grapple with the massive cuts imposed by central Government. He has had to cut £87 million from spending, and there are more cuts to come, but he has done so by cutting waste, reducing the number of senior managers and reducing salaries. All that has been done while council tax has been frozen, which is an extraordinary accomplishment. I receive very few letters from constituents complaining about local council services. Actually, as with the national opinion poll, people in Shrewsbury are rather pleased with local services and understand the difficult situation the council is in.

The point I want to make most strongly to the Minister is one that the leader of my council has told me. It is now starting to sell assets in order to reduce the massive debts to the Government that were racked up under Labour. A large percentage of the council’s expenditure goes on servicing those debts. At the moment, if a council wishes to reduce some of its debts to the Government, it will be financially penalised by the Treasury, because it invokes certain clauses on early repayment, just as paying off a mortgage early incurs certain financial penalties. I think that is wrong. The Minister has to look at the issue and negotiate with the Treasury. If a local council is attempting to reduce its historic debt and pay it off slightly earlier by making difficult decisions on sales and streamlining various services, it is very important that the Minister does everything possible to encourage the council by helping it negotiate with the Treasury on those early payments.

I would also like to pay tribute to Helen Ball, the chief executive of Shrewsbury town council, and Peter Nutting, who has run the council extremely well for many years.

Let us not forget rural broadband. I hope the Minister will talk about what additional support is being given to rural broadband, which is so important to so many of our constituents in outlying rural villages.

I reiterate the point that has been made about the importance of helping rural communities with large numbers of senior citizens. Shrewsbury has been voted one of the most attractive towns to live in. It is in the top 10 in England and is one of the most attractive towns for senior citizens to retire to. Let us not forget the additional expenditure required for areas with a large number of senior citizens.

Shropshire council and Telford council stand side by side. I hope the Minister will explain what incentives—what carrots and sticks—he is using to make sure that local neighbouring councils pool resources. The possibility of a shared chief executive has been mentioned. It is vital that the Department does more to encourage those two Shropshire councils to pool their resources and make cost savings and even to merge, if necessary.

Finally, on fire service provision, the Minister has kindly agreed to meet the local Shropshire fire authority. It has complained about the number of cuts it has had to go through and a fire engine is at threat in Shrewsbury. I hope the Minister will look kindly on us when we go to see him about the very important requirement to save that fire engine.