Local Government Finance (England)

Natascha Engel Excerpts

Wednesday 10th February 2016 Commons Chamber

[Jim McMahon]

I thank my hon. Friend. We can talk about figures, and this is a debate about the settlement, so we are likely to do that, but we need to think about the human cost too. Down the line, what will these things mean for individuals, families and our communities? Oldham’s £200 million of cuts leaves a gross budget of £188 million. More than half the town’s money has been taken away by the Government.

If the answer to providing adult social care is a 2% levy on council tax, let us follow that through to see what it means. For Oldham Council, a 2% increase in council tax, as directed by Government, would generate £1.5 million, because of course the town has a low council tax base to begin with. However, the increase—just—in the living wage impacts on social care contracts, and so, not even taking into account an older population or increased demand, there is a £2.7 million increase in wage bills. With £1.5 million generated in council tax and £2.7 million in increased wage bills through the Government’s living wage, the numbers do not add up. This does not even allow us to stand still; we are going backwards.

I am sure that the hon. Member for St Austell and Newquay (Steve Double) is very pleased with a cash bonanza to buy his vote today, but some of us were not so fortunate. We had a raw settlement and a raw deal from this Government, because on top of the £200 million in cuts, we cannot ignore the rural relief grant. So it is cash after cash after cash for rural areas, not taking into account a single bit of need. It has already been pointed out that 85% of this funding is being given to Tory shires, but let me go closer to home and look at Greater Manchester.

Trafford has some rural areas, but let us look at them: Bowdon, Alderley Edge and Hale—“Footballers’ Wives” territory. This is the most affluent borough in Greater Manchester. It has the highest council tax, the highest business rate base, and the healthiest budget as a result of this Government’s policies—but that is not all. Because of the way that you have protected your side, you have something in common with Trafford—Baroness Williams of Trafford, the Local Government Minister and former Trafford Council leader, who lives in Trafford. Is a “friends and family” discount being offered? What do we need to do, Greg? Do you want to come and live in Oldham? If that helps our financial situation, then we will—

[Madam Deputy Speaker (Natascha Engel)]

Order. I know that the hon. Gentleman is new, but he speaks through the Chair, so when he is saying “you” he is addressing me. Members are referred to as hon. Members or named by their constituency.

[Jim McMahon]

I am very sorry for that slip, Madam Deputy Speaker.

The truth is that the five most deprived areas get absolutely zero—nothing—from this Government. At the same time, the five least deprived areas, together, share £5.3 million between them.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Natascha Engel)]

Order. I must lower the speech limit to four minutes.

--- Later in debate ---

[Julie Cooper (Burnley) (Lab)]

I well remember the Prime Minister in 2010 speaking to the country and declaring that we were all in this together. That had a ring of fairness that resonated with the British people. He went on to say that those with the broadest shoulders would bear the greatest burden. Sadly, those were just words and were never backed up with action. My constituency is one of the least affluent areas of the country, and despite that, since 2010, Burnley Council has seen its funding cut by a staggering 54%. Cuts of that magnitude have also been the order of the day at Lancashire County Council. As if all that is not bad enough, during the same period other, more prosperous authorities have had their funding increased, which demonstrates an outrageous absence of fairness. The people of Burnley have known since 2010 that we are certainly not all in this together.

As the former leader of Burnley Borough Council, I am no stranger to belt-tightening exercises, and I can tell the House that it was exceptionally difficult at times. The Minister for Housing and Planning may well remember meeting me on more than one occasion when I pleaded with him to grant transition funding for Burnley. He will, no doubt, also remember the long and tedious process involved for Burnley and other authorities to secure that most essential funding. Having negotiated numerous hurdles, Burnley Borough Council demonstrated efficient transitional activity. It was, and is, an efficient council.

When this year’s provisional settlements were announced, councils across the country were, unsurprisingly, angry about the cuts to their budget, but it seemed like the Secretary of State was listening when he announced an additional £300 million over the next two years. We welcomed that, until we saw where the funding is going to go. Will it be distributed to those areas most in need? Of course not. Given this Government’s record, we ought not to be surprised that more than 80% of that additional funding will go to the most prosperous authorities.

Since 2010, the five least deprived authorities have, overall, had their budget cut by £7 per person, while, shockingly, the five most deprived authorities have had their budgets cut by more than £336 per head. Will the Minister explain what funding formula he has used to arrive at this latest settlement? I note that Burnley is to endure a further budget spending cut of 4.8%, while the more affluent areas of South Ribble and Uttlesford are to enjoy budget increases. So, while Burnley will have its budget cut by 4.8%, Uttlesford will have its budget increased by 6.4%. I have no problem with the people of Uttlesford, but I do with the lack of fairness.

Did those councils have to go through a lengthy process of targets and assessments to access that increase? Of course not. A word in the Prime Minister’s ear, it seems, and the budgets are increased. What message does that send to the people in Burnley? Has the Minister stopped for one minute to think what the impact of the cuts will be in Burnley? Does he even care?

The cuts will result in reduced social care services for the elderly and disabled; the closure of community centres and libraries; the loss of bus services; the loss of support for those fleeing domestic violence; and the withdrawal of services for those struggling to cope with autism. I could go on, but it is clear that the most vulnerable will carry the heaviest burden, while those with the broadest shoulders are given a bonus.

Burnley has been cheated, and I believe that these further unfair cuts will confirm to the people of Burnley and Padiham that this Conservative Government will always prioritise the needs of the richest at the expense of the poorest and most vulnerable. If the Minister were to change his mind and reconsider—

[Madam Deputy Speaker (Natascha Engel)]

Order.