| Previous Section | Index | Home Page |
Unique circumstances prevail this year. The Government’s White Paper, “Strong and Prosperous Communities” was published, the Local Government and Public Involvement in Health Bill and the Greater London Authority Bill are being considered, and we expect the report of Sir Michael Lyons. Indeed, we have
a Government who, on the face of it, are willing to give local authorities greater responsibility in place-shaping an area.
There was therefore an opportunity for this year’s local government finance debate to jettison the bombastic references to billions of pounds of Government expenditure, above-inflation increases, the most generous settlement ever and so on in favour of a discussion that confirmed that the Government had loosened the purse strings and been willing to trust local authorities with their own finances. I regret that that opportunity has not been grasped.
The Government have adopted the same old tired approach—I was about to say, of spraying the chamber with facts and figures, but that would be uncharitable to the Minister. He has deployed them carefully, with the deviousness of a chess grandmaster, rather than splattering them around the Chamber, disregarding all requests for changes to the formula and using headline figures that mask the reality of what is happening on the ground.
I should like to set out some issues that have not been tackled in the debate. The comprehensive spending review affords the Government an opportunity to make good. Let us consider wage settlements in local authorities. Perhaps the Minister can confirm in his response to the debate that the increase in local authority wages is expected to be 2.5 to 2.7 per cent. What does that mean for local authorities receiving less than that in real terms? Hon. Members, including my hon. Friends, have mentioned local authorities who will be in that situation.
What of the extra autonomy to be granted to local authorities promised by the White Paper, “Strong and Prosperous Communities”? Can the Minister confirm whether ring-fencing has been reduced? Of course, he cannot; instead, he will have to confirm that ring-fencing of council budgets is at record levels, and that local government is still being treated as a delivery arm of central Government rather than a tier of government in its own right. For all their talk of autonomy and greater devolution, the Government are again threatening councils with capping. Where does that leave councils that have a historically low level of taxation? What logic is there in requiring councils to re-bill if they have set a budget over the cap, when the re-billing costs are more than the saving in council tax? The Minister said that he had not yet established the exact principles in relation to capping. I hope that he will at least establish the principle that a requirement to re-bill in such circumstances would not be terribly sensible.
How does the Government’s claim of a 4.9 per cent. increase for English authorities bear up to scrutiny? The Minister’s statement shows that once specific ring-fenced grants are taken into account, the increase in total formula grant is 3.7 per cent. Some councils will receive the minimum increase—my council and many others will receive 2.7 per cent.—but the adjusted grant for my local authority and others pushes the increase below that level. For instance, Sutton will receive 1.7 per cent. at a time when, as other Members have mentioned, the retail prices index is running at 4.4 per cent. and inflation in local government might be higher still. [Interruption.] The Minister expresses desperation about my remarks from a sedentary
position, but I hope that he will explain why he does not agree with that point, which is made by many local authorities.
I do not want to be too biased in my presentation of the facts, so I will welcome the significant above-inflation increase in education spending. The Minister will know, however, that because education spending is ring-fenced, councils have no flexibility, and if savings are required, those end up being made principally in adult social services. As several Members have mentioned, according to representations made by the special interest group of municipal authorities outside London within the Local Government Association—that explains why it is abbreviated to SIGOMA—the Government’s failure to apply changes to the social services formula means that most metropolitan and large urban authorities will be deprived of about £250 million, putting them under great pressure. In opening the debate, the Minister talked about Members arguing over the minutiae of the formula. I hope that he was not referring to that £250 million, as it is a substantial sum.
Mr. Neil Turner: As chairman of the SIGOMA group, I am delighted to hear the hon. Gentleman supporting our claim for that £250 million. Does he realise that granting us that would ensure that his authority received less money? Is he happy with that?
Tom Brake: I am sure that the hon. Gentleman would not expect me to welcome the fact that his proposals would slash funding for my local authority. What is needed is a fair, transparent, open system, which allows local authorities to set the level of tax that they think is appropriate, and to pay the consequences at the ballot box, if necessary, at the next election.
Social services are therefore left reeling from a double whammy. One could argue that it is a triple whammy, as they are also hit by fees in nursing, residential care and home care all increasing by more than 4 per cent. No doubt the Minister will say that local authorities should beat down prices in those homes. But how realistic is that? I suspect that every Member present in the Chamber will have been lobbied recently by care homes in their constituencies stating that they cannot make ends meet with the rates that are currently paid to them; in fact, private individuals are having to make up the difference in many cases. I do not think that it is realistic to ask local authorities to play hardball with care homes, many of which are on the verge of closing—if they have not already done so—because of the amount that they must pay to stay open.
In its briefing, the Local Government Association identified many other problems that the report does not address. I do not have time to refer to them all in detail, but waste collection and disposal costs are rising at a rate of 9 per cent. per annum. The Minister would have some justification in saying that local authorities should have planned for that, given their awareness of an inbuilt increase in landfill tax. That is true, but authorities have also been hit by a substantial increase in transport costs, which are a key part of the costs of waste collection and disposal.
There is the issue of children with severe and complex needs. Thanks to medical advances many are now surviving and leading longer and fuller lives, but
the cost of an individual care package often runs into six figures. A limited number of such children can have a significant impact on a local authority budget. Other Members have mentioned concessionary fares, so I shall merely say that local authorities’ grant clearly does not cover the full cost and that the Government must deal with that.
Some authorities have experienced a sharp rise in the number of short-term migrants, those resident in a local authority area for less than 12 months. In some areas, there are hundreds or even thousands of such migrants. Admittedly many are young people who may not make substantial calls on council services, but no account has been taken of those who will.
Perhaps the most important issue is cost-shunting. There is evidence from all over the country of attempts to shift financial pressures from primary care trusts and acute trusts to local authorities. That is being done either directly or indirectly: for instance, PCTs may cut funds for voluntary associations which then expect local authorities to make up the difference. Open Door is a service that provides counselling for teenagers who are not yet ill enough to need access to acute mental health services, and may not need it if they receive counselling. A PCT has cut funding for that service without, apparently, trying to fill the gap with an alternative service. I am hopeful that it will do a U-turn, but we must wait and see.
There are many other examples, but I shall give just a few. There is no great significance in the authorities that I selected from the pile: they were in alphabetical order, and I took the top ones.
I am told that Durham county council is finding it
“difficult... to secure additional funding for shared cost packages especially in relation to Learning Disabilities clients.”
Even if there is no cost-shunting, the council can see that pressures in the primary care trusts and acute trusts will stop it from expanding services. Dudley metropolitan borough council tells me that
“planned improvements/developments have been deferred; there are particular risks around continuing care.”
“The PCT withdrew £0.4 million... for some services that were previously jointly funded.”
The costs were staff-related, but who had to pick them up? The local authority. Allerdale borough council says
“There is only a limited relationship between the Council and the PCT”,
and that the council is finding it difficult to involve the PCT in regeneration programmes.
All that shows that cost-shunting and the shortfalls that PCTs are having to address are already having significant effects on their funding for voluntary associations, on services and on partnership arrangements with local authorities. It is clear that that will get worse in the short term; it will not get better. I hope that when the Minister responds he will say how that has been taken into account in the settlement.
There is no room for complacency. A 14 per cent. increase in real terms since 1997 is not a cause for celebration, although I acknowledge that it is better than the poke in the eye that local government received from the official Opposition when they were the Government and were responsible for funding local
councils. Local authorities face many of the same battles now as they did 10 years ago. The words with which my hon. Friend the Member for Brent, East (Sarah Teather) concluded the debate on local government finance a little more than a year ago are as pertinent now as they were then:
“We need a new system of local government finance that is based on fair local taxes, localised business rates, local income tax and a simple grant mechanism, without ring-fencing, passporting or capping.”—[ Official Report, 6 February 2006; Vol. 442, c. 687.]
That is what we should have been debating today. Instead the Minister has deployed—in a reasonable way, I accept—a barrage of statistics that has served only to obscure the important issues involved in this debate. The Minister promised clarity and transparency; instead he has provided smoke and mirrors, and the debate has been the poorer for that.
5.11 pm
Mr. Andrew Slaughter (Ealing, Acton and Shepherd's Bush) (Lab): I have heard what has been said about the settlement. Some problems might, indeed, be prevented. I do not wish to make light of those problems, but I had 15 years of setting budgets for a local authority, which is a difficult process, and I would rather have had this settlement than any of those I had between 1990 and 1997. It has the advantages of giving an above-inflation increase in funding from central Government and of being the second year of a two-year settlement, which gives stability—and we are moving towards a three-year settlement. It also has the advantage that all responsible local authorities are now building Gershon, or Gershon-style, efficiencies into what they do and achieving real savings without cutting front-line services. Generally speaking, local government finance is in a much better state after 10 years of a Labour Government than it was previously.
Mr. Graham Stuart: Does the hon. Gentleman agree that during the 1990s under the previous Conservative Government council tax rises were at or near the level of inflation, whereas council taxes have doubled under Labour?
Mr. Slaughter: I shall talk about my local issues, but I agree that council tax rises should be kept to moderate levels, and they generally were—I had below-inflation increases and my authority moved down the scale. A balance must be struck between services and council tax increases, because council tax is a regressive tax.
The Local Government Association has acknowledged that this is not a bad settlement; by reading the language, one can learn how good or bad it thinks it is. I say that by way of introduction because it makes what is happening locally in west London all the more remarkable.
I should say for the avoidance of doubt that there are two local authorities in the area I represent, both of which are Conservative-controlled. I want briefly to mention the London borough of Ealing. Its council is having a council tax increase of 1.9 per cent., which I think is slightly too high, and it is also having some cuts in front-line services including in adult social services, which I think are unnecessary and inappropriate, but it
is largely following the previous Labour council’s financial plans—I do not know whether that is because they were very good plans or because the Conservatives did not expect to get elected last May and have not quite got their act together yet. However, I must be honest and say that although there might be some problems, there are not many.
However, I now turn to the situation in Hammersmith and Fulham—and, oh dear, what do we see? What we see is a pledge to give a rebate of 50p a week on average—the sum will, of course, be less for people who are poor or who live in a small property, and more for those in a higher band property. I have no objection to people being given 50p a week, but in the brief time that I have I shall explain what that rebate will mean.
Mr. Greg Hands (Hammersmith and Fulham) (Con): Will the hon. Gentleman give way?
Mr. Slaughter: I will do so in due course—it always helps my argument when I give way to the hon. Gentleman.
The local budget in Hammersmith and Fulham is, I fear, the work of amateurs, and I obviously take some exception to that, having crafted it so carefully over many years. The council has raided the ample balances left by the previous Labour council, which would account for 2 per cent. of its 3 per cent. rise in any event. It has received a 3.4 per cent.—£3.6 million—increase from central Government, which is equivalent to 6 per cent. on the council tax. It also had the benefit of a very good medium-term financial strategy, delivering above-Gershon savings every year. It has introduced two items of growth. First, it changed its corporate identity, so that everything in the borough is now painted blue—be it notepaper, buildings, signage or notice boards. A huge amount of public money is being spent on branding everything blue.
Mr. Slaughter: I think it was red before, but that was for purely historical reasons—under Labour and Conservative councils.
Secondly, the council produced fantastic propaganda sheets, which it put out, at the council tax payer’s expense, once a month. It produced three editions of a newspaper, saying what a wonderful job it was doing on every single issue. What one will not read in that paper—fortunately, we have an independent press, as well—is what I read every week in, for example, the Fulham and Hammersmith Chronicle and the Hammersmith and Shepherd’s Bush Gazette. The former ran the following headline: “Libraries living on borrowed time. Jobs set to go as council reveals proposals to slash £450,000 from service”. The latter ran the following headline: “Campaigners against council’s plan to close Tamworth Centre”, which is a mental health centre in Fulham. Another headline in the Fulham and Hammersmith Chronicle ran as follows: “PM backs campaign. Blair speaks out in favour of school’s fight against controversial closure”.
Mr. Hancock: Will the hon. Gentleman give way?
Mr. Slaughter: I would love to, but I really do not have the time.
I must admire the council for one thing: it really gets down to the details. According to last week’s Fulham and Hammersmith Chronicle,
“Hammersmith and Fulham Council hires out a variety of items for community occasions but bosses say ... increases ... will start in April ... To dress up as Father Christmas in Hammersmith and Fulham will soon cost you £15—nearly twice as much as the original price of £7.95.
Raffle drums will cost twice as much, up to £10.
If you want a game of five-a-side football, the inflatable goal hire price will rise from £13.80 to £20”.
This is comic stuff, but it has a serious side.
Mr. Hands: I thank the hon. Gentleman for giving way. He did not notify me that he would be talking about Hammersmith and Fulham council, but to be honest, I rather expected it. If he so objects to the council tax cut, can he explain why the Labour group put out a press release, which was then withdrawn, saying that it would have cut the council tax by even more if it was still in office? Most local people found that incredible, after 10 years of Labour council tax hikes.
Mr. Slaughter: The hon. Gentleman must not trespass too much on my time. The point, which I made clearly at the outset, is that it is perfectly possible to have a budget that cuts the council tax without these horrific cuts in services.
I turn to the serious point that I want to make in the limited time that I have left. Hammersmith and Fulham is pledged to cutting £34 million from a budget of £180 million. Anyone who knows anything about local government finance knows that that must mean very deep, almost unimaginable cuts in services. I referred earlier to the cuts in social services. We are talking about every home help being sacked; no assessment staff; cutting £1.5 million by tightening the criteria applying to the old and the vulnerable; £150,000 being cut from occupational therapy; and £500,000 being saved by closing mental health day care facilities. There are also the cuts in the general services that we all thought the Conservatives were going to support. Some £1 million will be cut from the refuse services and street cleaning budget. Under Labour, Hammersmith and Fulham was the fourth cleanest borough in London. What will it be after four years of £1 million-worth of cuts from the Conservatives?
The Irish centre, in Hammersmith Broadway, which has a national and not just a London-wide, reputation, has had its budget cut. The Lyric theatre, which also has a national reputation, is having its budget cut. The borough’s play and youth services will not exist, given that £320,000 is being cut from those services. Some £400,000 is also being cut from the library service. These are extraordinary, almost unimaginable cuts.
One might think that education was free from these cuts, given the hypothecation of the budget—but no. Three schools are to close, not on educational grounds but simply so that the sites can be sold off in order that debt charges can be repaid and further cuts made in the council’s budget.
| Next Section | Index | Home Page |