Newcastle upon Tyne City Council

Nicholas Brown Excerpts

Tuesday 8th January 2013 Commons Chamber

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

I congratulate my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this important debate for the people of the city that we both have the honour and privilege to represent.

It is an unfortunate fact that the map of the cuts distribution and the political map of England are almost identical. The average cut per head for Labour councils is £107, while for Tory and Liberal Democrat councils the average cut is just £36 and £38 respectively. Of the councils with a cut of more than £100 a head, 86% are Labour controlled and only 5.4% are Tory run. As a matter of urgency, the Government should review the way in which the funding formula distributes the cuts burden across different local authorities. I support the call made today by the leader of Newcastle city council, Nick Forbes, to establish an independent body to determine objectively council funding arrangements.

Other issues are specific to Newcastle. In 2009, Newcastle was in the top seven of the 36 metropolitan councils in England for indebtedness. In 2004, when the Liberal Democrats gained control of Newcastle city council, the municipal debt was £431 million. By 2010-11, under the Liberal Democrat administration, that had risen to £962 million. The cost of servicing that debt is more than £40 million a year. That comes straight out of the local authority’s budget. It cannot be adjusted downwards, and if interest rates rise, it will go in the opposite direction.

Newcastle has to meet the costs of cared-for people, out of all proportion to its tax base. There are currently 522 children in care in Newcastle. That translates to 100 children in care per 10,000 children, compared with the England average of 59 per 10,000 children. The situation is the same with the elderly. In 2011-12, the council helped to support nearly 10,000 adults with substantial or critical care needs and more than 17,000 people with lower care needs. In Newcastle, 63 adults per 10,000 are receiving permanent or temporary residential or nursing care. The England average is 39 per 10,000 adults. Pressure on those services is mounting rather than declining, yet the existing position is not even inflation-proofed.

In 2003, the town of Gateshead and the city of Newcastle bid together for capital of culture designation and made a very credible case. The current Government’s policies have forced the council to consult on ending the culture budget, which totals some £1.6 million a year. That is so far removed from anything that Newcastle citizens would want, and from any rational, economic development-based view of the role of the arts in creating employment in a regional centre such as Newcastle, that it serves as an exemplar of how far the council has been forced into considering unpalatable decisions. The situation is all the more ironic because under the Liberal Democrat administration, the council scandalously spent millions of pounds on the mismanaged Waygood art gallery project, which totalled many times more than the council’s annual cultural budget today.

Even essential services such as Sure Start cannot avoid a reduction. The council has taken steps to try to reduce the cost burden on that important service in the short term, but with the added cuts announced by the Government it looks likely that larger reductions will be needed. That flies in the face of the Prime Minister’s pre-election pledge to protect Sure Start.

We cannot even get help from the Government on relatively small things. Months ago, on 4 July 2012, I raised the issue of estate agents’ “To Let” signs. The Government promised to help, yet so far nothing has been forthcoming.

Overshadowing all that is the employment situation in the north-east. More than 3,200 people are unemployed in Newcastle upon Tyne East, nearly 1,000 of whom have been unemployed for more than a year. There are 10 jobseeker’s allowance claimants for every advertised vacancy at the jobcentre, and unemployment is heavily concentrated in the former shipbuilding riverside communities, with an unemployment rate of 14% in Byker and more than 18% in Walker, compared with an average rate of 9.5% for the north-east as a whole and 7.8% for England.

The council’s contribution to the economic development of the east end and the riverside is significant and underpins what is easily the best prospect for building the employment base of the east end of Newcastle. Logically, that should be in the Government’s best interests as well, and they should offer a helping hand.