Local Government Funding

Debate between Steve Rotheram and Lord Barwell

Monday 6th December 2010 Commons Chamber

[Gavin Barwell]

The hon. Gentleman is making a powerful case against funding being cut in deprived areas and the money going to affluent areas. If I told him that, according to the Library, Liverpool, like my authority, had one of the lowest increases of the past five years—a 3% cut from the Labour Government—and that the biggest increase went to Rutland, which got a 25% increase, what would he say about the Labour Government’s record over the past five years?

[Steve Rotheram]

I would say that it is not just about one specific funding stream; it is about an overall package. Liverpool benefited greatly under the Labour Government —so much so that the hon. Gentleman’s friends on the Liberal Democrat Front Benches used to say that the Lib-Dem controlled Liverpool city council was a flagship council because it had got so much money from the Labour Government. Don’t try to give me lessons about what happened in Liverpool, mate!

In June, the Department for Communities and Local Government wrote about the immediate front-loaded and ongoing savings to be made by local authorities that

“the Government is satisfied that it has adopted a fair approach to making the necessary reductions.”

In the comprehensive spending review, the coalition promised to

“limit as far as possible the impact of reductions…on the most vulnerable in society, and on those regions…dependent on the public sector”.

The Government never tire of reminding us that we are all in this together, in the new age of austerity, and insist that their belt-tightening is fair and progressive. So much for the rhetoric. The reality is that the proposed one-size-fits-all local government finance settlement, with its removal of ring-fenced funding for poorer regions and its top-slicing of the formula grant, is set to hit the poorest councils the hardest—none more so, unfortunately, than Liverpool city council.

Whether the Secretary of State likes SIGOMA or not—he did question its findings—its research shows that of the 20 worst-hit local authorities financially, all but two are in the top 20% of most deprived areas in the country. Conversely, of the 20 councils that do best out of the comprehensive spending review, all but two are in the top 10% of wealthiest local authorities. The SIGOMA report concluded:

“The current finance settlement perpetuates inequality rather than allowing areas to operate on an equal footing.”

SIGOMA is not alone in its findings. Following its own analysis, the TUC has affirmed that the Government’s budgetary policy

“will risk the recovery, increase inequality and threaten social cohesion”.