Local Government Finance (England)

Stephen Twigg Excerpts

Wednesday 10th February 2016 Commons Chamber

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

Let me tell the hon. Member for Torbay (Kevin Foster) that this is an issue about distribution and the unfairness of the distribution of these cuts. Some parts of the country that have the greatest social and economic need, such as Liverpool, are facing the biggest cuts yet again. That is what Labour Members are genuinely very angry about, reflecting the anger in the communities we represent.

My hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) has already spoken about the challenges that we face in Liverpool. I join her in paying tribute to the mayor of Liverpool, Joe Anderson, who has done a fantastic job in leading Liverpool over the last six years. Where did he start? He started with efficiencies. Efficiencies could be made, and he made them. Then he turned to innovation. He made a city deal with the Government that enabled him to rebuild or refurbish 12 schools that had lost out when the Government cancelled Building Schools for the Future. He took the lead, working with other council leaders in Merseyside, in securing city region devolution.

It is not a question of a choice between efficiency and innovation on the one hand and cuts on the other. Liverpool is facing up to the challenges, but even with efficiencies and innovation, its funding from central Government has been cut by 58%. That is simply not tenable. It is simply not possible to balance the books without harming front-line services.

That brings me to the £300 million of Government transitional support. Conservative Members have made legitimate points about rural payments. Rural poverty is undoubtedly a real issue, as is an ageing population, but if that is what the transitional money is about, why on earth is Surrey the biggest beneficiary of the additional money? It is not going to the poorest rural areas. Despite that 58% cut in central Government funding, Liverpool will not receive a penny, while Surrey will receive a substantial amount.

Let us have a fair system of funding. I do not want to talk about “urban versus rural”, because this should be about need and deprivation. Yes, there is deprivation in rural areas, but there is also considerable deprivation in constituencies like mine. I want to ensure that there is fairness and justice in the treatment of different types of authority, but hitting a council like Liverpool with a 58% cut and then providing no transitional support does not strike me as reasonable.

[Graham Stuart]

According to the figures that I have seen, the average cuts in Government-funded spending power in this Parliament will be 19% in metropolitan areas and 30% in rural areas, and the figure for Liverpool is just over 15%. Where did the hon. Gentleman find his figure of 58%?

[Stephen Twigg]

I am talking about the actual reductions in Liverpool’s actual funding from central Government. However, the hon. Gentleman has helped me by bringing me to my next point, which other Members have already made today.

In areas with greater social and economic needs and higher levels of poverty, such as my constituency, the council tax base is such that allowing local authorities to increase council tax simply does not have the impact that it has in Surrey and some of the wealthier London boroughs. My hon. Friend the Member for Liverpool, Riverside spoke about social care. The increase in council tax that Liverpool has been allowed will enable us to raise £2.7 million. That is better than nothing, but the city’s social care budget has been reduced by £90 million since 2010. We can raise £2.7 million, but the gap is still £90 million.

My hon. Friend the Member for Leicester West (Liz Kendall) made the important point that, while we must take account of demographics and the number of older people in each area, we must also take account of ability to pay. One Member mentioned the number of people aged over 85 in one of his constituency wards. Clearly that brings pressures, but life expectancy in poorer parts of the country is such that not many people live until they are 85. Those are the kind of pressures caused by an ageing population that are faced in areas of high poverty, and they are different from those that are faced in other parts of the country.

I urge the Minister and the Secretary of State to think again, and, in particular, to take up the excellent suggestion made by my hon. Friend the Member for Leicester West and make the better care fund money available immediately. That could at least help us with what is an emerging social care crisis. As a number of my hon. Friends have said, it is a human crisis not just in terms of the provision of social care, but in terms of the additional pressure that is placed on our health service.

I am hopeful that devolution for the Liverpool city region will bring many benefits, but those benefits are more than cancelled out by the scale of the cuts, which are simply unfair because they hit the poorest parts of the country—constituencies like mine—much harder than the rest.