Funding for Local Authorities

Nick Harvey Excerpts

Thursday 10th October 2013 Commons Chamber

[Sir Nick Harvey (North Devon) (LD)]

It is a pleasure to support my neighbour, the hon. Member for Tiverton and Honiton (Neil Parish), who secured the debate, and to echo some of his points. I also want to pay tribute to the hon. Member for Sheffield South East (Mr Betts), who is not in his seat at the moment but who made a powerful speech, drawing on his many years in local government. It was completely impartial in being equally rude about everyone as he set about his exposition of local government and he made some good points.

I am as committed as anyone on these Benches to the Government’s drive to get the deficit under control. It was inevitable that local government would play its part in the deep cuts that had to be made to public services in the course of the past three years. Local government has played its part; big cuts have been made. In my county, Devon, we have seen cuts to bus services, children’s services, libraries, social care and many others. As the polls to which other participants in the debate have referred are showing, we have just about got away with it. The public are still with it and are still expressing confidence in the services that local government is providing, but, looking at the funding settlement for this year and what that will mean for councils in the next three, I sincerely doubt that another poll taken in three years’ time would show anything like that satisfaction level. I believe that councils up and down the country, regardless of their political leadership and of whether they are in rural or urban areas, have set about driving down their costs, have done everything they plausibly can to secure better value for money and have struggled, as far as they are able, to do so without damaging front-line services. But we have got way past the point where they can be expected to do so again without its having a profound impact on front-line services. I simply do not think that the Government will get away with this if they go through with it on the scale they are currently planning.

People have stomached, more or less, the austerity measures of the past three years because they have seen the grim economic picture that has made them necessary, but as more and more Government spokesmen get up and, rightly, talk up the fact that economic recovery is showing signs of getting under way—we would all hope that that continues and gains momentum over the next two or three years—it will become increasingly inexplicable to people that their public services are being eroded to nothing. I echo the comments made by others when I say that people come to my constituency surgery and say, “It is all very nice having a shiny bus pass, but it is not a lot of use if there isn’t a bus that I can catch.”

Speaking personally, the road outside my house has now collapsed on both sides. There is a sheer drop. There is just about a car’s width that it is possible to drive on. I have asked the county council when it intends to repair it and I am told it will not be repaired for two years. If that is typical of what is going on, particularly in authorities that, like Devon, have vast expanses of highway to maintain, the public will not tolerate it, and neither should those who represent them. That reflects the dissatisfaction that we have heard from many Members during this debate.

By 2015-16, Devon county council’s revenue support grant from Government will have been reduced by around 60% in just four financial years. It will have to make another £113 million of cuts in the next three years, on top of the £100 million of cuts that it has already made. We can talk about tough choices as much as we like, but we are going to see complete areas of public service ceasing altogether. I do not believe that the public understand, are ready for or are in any sense willing to put up with that.

The situation for the district council in my area, North Devon district council, is just as bad. It will have experienced a 40% cut in the Government grant to its services, and that will mean that by 2015 the size of its budget will have come down by a third in cash terms since the start of this Parliament.

All this suggests to me that although cuts across the board are absolutely necessary, the Department for Communities and Local Government is taking more than its fair share of the cuts, even in the grim scenario that we are all familiar with.

But the main purpose of my contribution to this afternoon’s debate is to flag up in absolutely clear terms that the disparity between the treatment of rural and urban areas is simply no longer tolerable. It cannot be right that the grant support coming to people living in a rural area is 50% less per head than that going to people living in an urban area. That is £130 a year per head less grant support coming into rural areas than goes into urban areas. In consequence, people are paying £83 more on their council tax bill.

The rural areas of England and Wales are the poorest in the country. That takes a bit of getting one’s head round, but it is a fact. The next-door district to mine, Torridge district council, has the lowest GDP per head of any district in the entire United Kingdom. People come to Devon and Cornwall in the summer; the sun is shining and they think those counties are affluent. They are not. Devon and Cornwall are the two poorest counties in the country.

Now will somebody tell me why the people who earn the least in the country pay the highest council tax, get the least support from Government and get the thinnest and most hopeless level of public services back? It just is not right that public services in our area are so much thinner than they are in other areas. It is not right that there are so few social workers going out to deal with children. It is not right that there are so few buses. It is not right that I have had people moving into my constituency with disabled children who, about a year later, have said, “It is hopeless. It is impossible to bring up a disabled child in this county. We are moving back from where we came.” It has been going on for decades. It was hidden during the years when local government was getting bigger and services were growing, but it is all too horribly visible now, when everything is getting smaller. A number of us warned Ministers this spring, when they pushed their spending settlement through, that they needed to get back to the issue and sort it out before they came looking for our support again next year.

[Mr Graham Stuart]

I congratulate my hon. Friend on a passionate and well informed speech and on his becoming a chairman of the rural fair share campaign. Does he remember that beautiful summer of 2012, when the Government looked again at rural areas and decided that sparsity should get greater weighting, and then at the end of a year damped it all away and now propose to freeze that injustice, that inequity, all the way to 2020? It cannot be tolerated.

[Sir Nick Harvey]

I am grateful to my hon. Friend for his intervention. I do remember the Department taking the issue away and coming up with a partial solution. It was going to give greater weight to the sparsity factor. I thought that was a welcome sign. I would not have expected that to happen under a Labour Government, but I was delighted that when the Conservatives and the Liberal Democrats formed a Government together, the Department for Communities and Local Government finally had a look at the issue and came up with a workable solution.

What then happened is that the urban lobby beat a path to the Department’s door and said, “Up with this we will not put.” In its place came something called damping. In my experience, damping was meant to damp the effect of a change that was being made. It was, in a sense, a transitional relief so that the adjustment would be made in stages, but the difference that damping has made in these circumstances is that it has completely reversed the effect of what the Department had done and made it ever so slightly worse.

Time is running out. There are a couple of months left before we see the settlement for next year. I listened to my hon. Friend the Member for Tiverton and Honiton explaining the demand of the campaign—that by 2020 we want to have reduced the funding gap from 50% to 40%. Politics is a team game, so I am playing along with the team. I think that is horribly under-ambitious. The Government should sort the whole bleeding thing out straight away, but I am playing a team game.

To conclude, the poorest people are paying the highest council tax, getting the least support from Government and getting the thinnest service. It is not right. Do not ask me to vote for it again in the Division Lobby next spring.