[Mr. Roger Gale in the Chair] — Working Neighbourhood Funding (Leeds)

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. McCabe.]

9:30 am
Photo of George Mudie

George Mudie (Leeds East, Labour)

Once again, it is a pleasure to secure a debate under your benevolent and fair chairmanship, Mr. Gale. I am delighted to have obtained this debate and to see so many of my Leeds colleagues here, which indicates how important the matter is to Leeds. The matter affects the future of the local Leeds economy and, above all, the social cohesion of the city, which everyone has worked so hard for decades to improve and maintain and which is now threatened by the measure that we are discussing this morning.

In December, the Government announced the ending of the neighbourhood renewal fund. From April, a working neighbourhood fund will be in place. The Minister stated that the fund would

"provide resources to local authorities to tackle worklessness and low levels of skills and enterprise in their most deprived areas."

I am sure that nobody in the Chamber has any trouble with a change in emphasis. I have always been of the view that the way out of poverty is through work—if a person is physically able to undertake work—and not through the benefit system. The problems in doing that are immense, but the rewards are great for both the community and the individual. Work gives confidence, dignity and financial freedom to the individual and their family, and the knock-on effects on children are palpable to see. Therefore, I do not fall out with the change of emphasis.

The fund amounts to £1.5 billion over three years. As is usual with Government announcements, that sounds like a huge figure, but it is less than what was available in the renewal fund by quite a few million. With a new fund come new criteria, and Leeds now fails by the narrowest of margins to qualify for funds. The partnership arrangements between the Government and the city council, which aimed to deal with the problems of inner-city poverty, have been ended by a Labour Government. Those arrangements have been in place for more than 30 years under both Conservative and Labour Governments.

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Mark Field (Cities of London and Westminster, Conservative)

I pay tribute to the hon. Gentleman for putting this debate in a non-partisan context. The problem that he has alluded to in relation to Leeds applies also to the City of Westminster, which has just missed out on funding. Does the hon. Gentleman agree with some local authorities that those decisions have come too late, not least because of the accumulation of different statistical values? In Westminster, and probably also in Leeds, various plans were made on the basis of continued funding for programmes. If the Minister cannot go back on the entirety of the proposals, we call on him to keep the funding for the next financial year for both Leeds and the City of Westminster.

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Roger Gale (North Thanet, Conservative)

Before we proceed, may I remind hon. Members of the need for brevity? May I also draw attention to the fact that this is a localised debate. I am perfectly prepared to allow a slightly broader discussion about neighbourhood funding and, therefore, to allow the Minister to respond to any points, if he chooses to do so. However, a significant number of hon. Members are from the Leeds area, and it is only right that they should dominate the debate.

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George Mudie (Leeds East, Labour)

You have made a fair point, Mr. Gale. However, I totally understand the point made by Mr. Field, to which I was going to refer. At the risk of repeating myself, what the hon. Gentleman has said is perfectly right. When the Minister made the rate support grant announcement a few weeks ago, he finished his speech by referring to a new partnership with Karen Dunnell from National Statistics. That decision was taken to take a closer look at the matter, because there are continuing questions and problems with the accuracy of statistics in the big cities, which is a problem that has been acknowledged and referred to.

The hon. Gentleman has made an important point, which I want to emphasise. Following the Minister's announcement of the figures, three authorities have been told that they are getting different results. The hon. Gentleman has referred to Westminster, which is being taken out of the list. Another authority has also been taken out of the list, and Waltham Forest is going into the list. All sorts of questions can rightly be raised about the statistics.

As my right hon. Friend John Battle has reminded me, a statistical blip means that Leeds has lost more than £40 million, which we expected to get to deal with problems over the next three years. The financial effects of that are stark. We expected to receive funds worth £54 million. I chided the Minister in the Chamber, because when he told me that we were going to lose £40 million, he used statistics to say, "Ah, but we will give you £60 million in the first year and £20 million in the next year." He omitted to say that in the third year, the funds went down to absolutely nothing, which is £12 million of the £54 million that we expected to receive. He also failed to refer to the money from the Department for Work and Pensions in the fund. Therefore, if an authority is not one of the 66 authorities that are part of the neighbourhood working fund grant list, they do not get the DWP money or any reward money. Some £50 million will be used to reward authorities for doing well on tackling poverty. I find it incredible that anyone should think that authorities need to be rewarded. Yet, that is exactly the amount of money that Leeds is losing, because we have been removed from the list.

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John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

I listened very carefully to my hon. Friend when he made some of those points in our debate on 4 February. He said then that Leeds was losing £54 million that it expected to get. A little later, he said that Leeds was losing £52 million. I have been unable to work out exactly how he reached those figures. It would be incredibly helpful if my hon. Friend were to explain where his figures come from.

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George Mudie (Leeds East, Labour)

I am sorry that the Minister has such bad civil servants that they cannot provide him with the figures. However, the good civil servants in Leeds will provide him with the details that he wants. We receive between £15 or £16 million a year in neighbourhood renewal.

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John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

rose—

Photo of George Mudie

George Mudie (Leeds East, Labour)

I will give way in a second, and then the Minister can challenge the figures. We are also in receipt of more than £700,000 in DWP money. On the basis of getting the same amount from the working neighbourhood fund, we expected to get £54 million from that fund alone. The Minister may say, "Oh, those are great expectations; the reality might have been different." If he were to consider giving Leeds what he has given other major cities in Britain, I would happily accept that amount.

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John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

I am simply trying to understand the figures. For the current year, Leeds receives £14.9 million under the neighbourhood renewal fund. That is part of a total of £63 million under that fund between 2001 and 2008. Under the DWP disadvantaged areas fund, Leeds will receive £758,000 this year. For the life of me, I cannot make any extrapolation from any of those figures add up to either £54 million or £52 million over the forthcoming three-year period, so I am simply asking my hon. Friend where he gets his figures from when he talks about what Leeds expected to get over the next three years.

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George Mudie (Leeds East, Labour)

I am happy to cross swords with the Minister, who has more resources than the city and I would ever dream of having. I am happy to discuss any discrepancy in the figures that he cares to argue about. Leeds has supplied, and backed up, the figure of £54 million. If there is a dispute about whether it should be £60-odd million, £50-odd million or £40-odd million, we will negotiate with the Minister, because we are reasonable people in Leeds. If the Minister is in financial difficulties, I am sure that we can reach agreement, but what we cannot do is accept a move from £50-odd million to £12 million and then, in the third year, to absolutely nothing.

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John Battle (Leeds West, Labour)

My hon. Friend has rightly championed this cause, and we in the city are grateful to him for doing so. The £14.9 million that we would lose from antisocial behaviour units, the drug intervention project, neighbourhood wardens and the burglary reduction projects levers in other money from other pots, and when we add the sums together, including money from other Government budgets, we are well up on the £43 million, as I think it was, at the baseline. Does my hon. Friend agree that we have to keep in mind the fact that the money in this fund accesses money in other funds, which will now be denied because we will not receive the basic money?

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George Mudie (Leeds East, Labour)

My right hon. Friend is entirely correct, but if the Minister is having difficulty, let us not muck about with big figures; let us consider the schemes. This morning, I will supply him with a list of current schemes that face total cuts or 40 per cent. cuts next year down to oblivion in the third year. We are not discussing abstract figures. We are discussing schemes that work in all sorts of areas to deal with the problem of inner-city poverty, and those schemes will disappear because of this decision. That is what we are arguing about.

The social effects are alarming. We often refer to two-speed Leeds—it is openly described in that way. As is usual in every big western city, we have a posh, prosperous centre. We also have posh, more prosperous suburbs, but in between, as with every western city from America to Europe, we have the inner city, with all the problems that are identifiable no matter whether people are in Paris, Rome, Washington, New York or Leeds.

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Fabian Hamilton (Leeds North East, Labour)

I thank my hon. Friend not only for introducing the debate but for the points that he has made. Following his point about western cities, does he agree that even within some of the more prosperous suburbs—for example, Alwoodley in my constituency, which is one of the richest in the country—there are pockets of deprivation that match anywhere in the poorest parts of the poorest areas of our country? On top of that, we have inner-city areas such as Chapeltown and Harehills, to which he has referred.

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George Mudie (Leeds East, Labour)

My hon. Friend is exactly right. I may repeat myself, but it is worth making the point in case I forget it that the city council argues that if the old city boundaries were to apply, in which case the boundary ran around the urban, built-up areas, our figure would be not 19.96 per cent. but 36 per cent. That demonstrates the depth and the comprehensiveness of the poverty in all the areas within the inner city of Leeds.

What are the problems? I need not spell them out to colleagues, but the Minister should be aware of them. I am referring to high unemployment, bad health, indifferent education, crime, violence and vandalism. Those are all problems that the Government have targeted over their lifetime, but they are no longer visible to the Government. They do not exist now in the Government's eyes, and no resources will be coming into the city in three years' time to help with the objective of getting people skilled and into work and changing the nature of the inner city.

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Mark Field (Cities of London and Westminster, Conservative)

Will the hon. Gentleman accept that the statistical analysis by Governments of all colours in recent years no longer holds sway, for the following reason, which applies in London and, I am sure, in Leeds? In inner cities, the hypermobility and hyperdiversity of the population mean that many statistics are both unreliable and quickly out of date, which obviously has an enormous impact on much of this funding.

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George Mudie (Leeds East, Labour)

Yes, the hon. Gentleman is absolutely right. We return to the question of how accurate statistics are. There is also the question of the base and the time. I need not remind my colleagues of how the inner city has changed in the past five years, because of the influx of people seeking asylum who have been sent to Leeds by the Government. Those people have changed communities, but let us consider the issue in economic terms and how it has affected the statistics. We all know the numbers. Thousands have come into our inner-city constituencies. That is why I cannot trust the statistics, which are seriously out of date. If those people are being considered for asylum, they bring £35 a week into each household—£35—and they have replaced people who have moved to other parts of the city. I cannot think of any indigenous family who have made do on less than £35 a week. I submit that that is impossible, so the areas have become economically weaker.

Why have the Government concluded that Leeds no longer needs help? The technical answer is that to qualify, the council has to meet one of three criteria. The criterion that Leeds has the overwhelming argument about is that super-output areas have to be in the 10 per cent. most deprived on the index of multiple deprivation. Stand up anyone who understands that. Shoot the man who described them as super-output areas.

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George Mudie (Leeds East, Labour)

Or woman, but I am sure that a woman would have more sensitivity. [Interruption.] Positively so.

Leeds has 476 of those areas, so mathematically it requires 96 of them to come within the relevant category to qualify. It actually has 95, so it has lost £40 million of grant because, as the Leeds finance and regeneration people tell me—the Minister will have to check this; it has not been challenged to date—that figure equates to 19.96 per cent. If it were 20 per cent., we would have received £50-odd million over three years. Because of 0.04 per cent., we will get nothing in three years and disappear from the list. Our poverty will disappear and our inner-city problem will disappear.

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Justine Greening (Shadow Minister, Treasury; Putney, Conservative)

As a London MP, I recognise many of the issues that the hon. Gentleman has outlined, and I have a lot of sympathy in that regard. Does he agree that it is intuitively wrong that an area that is classed as deprived on 31 March one year is literally the next day suddenly regarded as good enough to receive no investment?

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George Mudie (Leeds East, Labour)

I could not have put it better—that is exactly the question I am asking. I shall depart from my script to say that I have had both public and private discussions with the Minister on the matter. The answer to the question is that a line has been drawn: it is lovely if one's city is above the line; but Leeds is below it. That puts tackling inner-city poverty to level of a television game show, like saying "Oops! You just missed and you are going home with no money!" That might make nice television, and it might be riveting for people of that mind, but it is scandalous when it comes to tackling poverty. What the Government are saying is that 149,000 people in Leeds, who are in the deepest poverty and deprivation and all that I described, and who represent the 95 SOAs, are suddenly of no interest to the Government. If there were 20 per cent., the Government would have been very interested in giving money. How can a Minister in a Labour Government, who owe their existence to attacking such problems, suddenly draw a line and say, "We do not recognise you"?

Leeds is the only major city in Britain not to be included in the list—Manchester, Birmingham, Liverpool, Sheffield and Newcastle are all included. I believe that it is the only major city in the western world not to have a partnership between the Government and the local authority to tackle inner-city problems, which we all have and work hard to deal with.

What has happened to Leeds? As Justine Greening has said, our poverty disappeared in the eyes of the Government on 31 March. How can a Labour Government call themselves a Labour Government if they decide to tackle poverty at a given level, but say that cities above that level do not need any money because the poverty does not exist? It is not acceptable—it is bizarre and grotesque. The Government cannot go to 149,000 people in Leeds who live in conditions that almost defy description—they have no ambition or hope and live in terrible conditions—and say that if there were 0.04 per cent. more people, we would help. That is how to decide game shows, not social policy. There cannot be such a cut-off.

If the Government do that, what will they say to people? What will MPs say to people when we visit them and they tell us about their genuine problems—they do not have to tell us about those problems, because we live among our constituents and see them every time we go home? We sense that things have not changed much, and we are angry about it. Things did not change that much when we received £50-odd million to help change things, so what on earth will happen to the city when the money disappears? Things will inevitably get worse.

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John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

indicated dissent.

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George Mudie (Leeds East, Labour)

I see that I am amusing the Minister. That shows the gulf between some of us and the Government—I say that genuinely. I have some questions for the Minister.

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John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

Will my hon. Friend give way?

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John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

rose—

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Roger Gale (North Thanet, Conservative)

Order. The hon. Gentleman is not giving way.

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George Mudie (Leeds East, Labour)

I am certainly not, Mr. Gale. I shall give way, if the Minister answers my questions, which I hope he will, but he will have time later. How can he justify making Leeds the only western city to receive no Government help? How can a Labour Government refuse help to 149,000 people who live in deprived areas and 65,000 working-age people who are on benefits? We are supposed to be targeting those people, but Leeds has only 65,000 of them, so it is too small to target and to receive help.

It is no excuse to say that a line was drawn. Before the Government draw a line, they should look at the consequences—I hope that they would do that on a matter as important as inner-city poverty. They should have drawn the line and run it through the computer to see what might happen. They should not run it through the computer and say, "Tough! Leeds or whatever other authority is out". Should they not then say, "Get me the list, so I can see who's out" and query the list? Did the Minister know that Leeds was out by 0.04 per cent. on the criterion? If he did not know, why not? If he did, did he ask the Oxford people to check their figures? Will he tell us the margin of error that is permitted, expected or acknowledged in the statistics? Is there a margin of error? Even if the Minister did not do those things, why did he not rethink where he drew the line? Taking Leeds out is an insult, and it is an insensitive decision.

The effect is horrifying, as my colleagues will say. It is bad enough now, so what is going to happen when there is no money for the inner city? What will the decision do? At the last count, it will close 67 schemes within three years. The schemes work on antisocial behaviour orders, health, education, youths and drugs—they are designed to achieve the objectives of working neighbourhoods. Some of us know inner cities and understand the problems and the people and what they go through. There are generations of people from families who have never worked. There are youngsters in their 20s and 30s whose dads did not work, who have not worked themselves and whose children are growing up to believe that they will not work, too. Because of the ghettoised system and bad education, those people are unskilled and unable to get a job. There is no anger in them—they have low self-esteem and lack confidence. Some people do not understand the trauma of those things and do not want to do something about them.

The problem has to be dealt with on an individual basis. It is not like putting a shape into a box. It is clearly a business of consulting cities, building relationships and confidence and identifying the problems, be they drugs, health, bad education or even bad attitudes. Why should people not have bad attitudes? I have a bad attitude, because I lived on those estates. It is about finding the problems and carefully and sensitively building people up and getting them to contribute as a stakeholder. Amazingly, we sometimes find that that can lift a whole family's morale. We could work with children in schools, so that they understand the importance and see the sense of education and believe that they will go into a job. It is heartbreaking when I speak to youngsters in secondary or high school who ask me, "Why should I bother? I'm not going to get a job." That is how they think.

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Paul Truswell (Pudsey, Labour)

My hon. Friend's point was recently reinforced by the fact that Leeds has come top of the league table—it is an onerous position—for the number of 16 to 18-year-olds who are not in education, employment or training. Is that not the type of generational problem at the younger end that we need the resources that he has discussed to tackle?

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George Mudie (Leeds East, Labour)

Absolutely. That is true whichever age group we are talking about. The over-50s need help to build their confidence and to reskill, and the same is true of parents, youngsters and children. My hon. Friends the Members for Pudsey (Mr. Truswell) and for Leeds, North-East (Mr. Hamilton), and my right hon. Friend the Member for Leeds, West know about that from their work on the council—the latter worked hard as chairman of committees on housing and industry to bring those elements together. We need jobs for people in the communities.

The city produces 30,000 new jobs every 10 years. The aim has always been to skill the indigenous Leeds people to fight, compete for and gain their share of the growing number of jobs, and the city can do it if the political will is there.

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Fabian Hamilton (Leeds North East, Labour)

Does my hon. Friend agree that for more than 20 years Leeds has been one of the most successful cities in the country in terms of growth in jobs, yet, as he has said, those jobs are not going to those who need them most in the inner-city areas, because those people do not have the necessary training or opportunities? Instead, the jobs have gone to people living outside the city in the more prosperous areas of West Yorkshire and North Yorkshire, who are flooding into the city as commuters, which causes further congestion and poverty for those who really need the jobs.

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George Mudie (Leeds East, Labour)

That is exactly the point. On the motorways in the Leeds area in the morning and evening, one can see the number of people who take employment in Leeds and then spend their money elsewhere. It is galling for inner-city MPs, and for all Leeds Members, that so many of their constituents are unskilled, unemployed, poor and with bad lifestyles, because we have not been able to raise enough resources and because there has not been the political will to pull together and nurse them in back to mainstream jobs.

I finish with some questions for the Minister. I am cynical enough to know that when it comes to Adjournment debates, apart from a few hurried comments, Ministers' speeches are written beforehand. We are not going to change the Minister's mind—we are not going to get a decision today—but I speak for all hon. Members and certainly for all Leeds Members in asking the Minister to think again about drawing such a line. We cannot go from having a problem to not having a problem by 0.01 per cent. There is either a problem or there is not, and there really should be a gearing, so that less significant problems get less money, which has always been the way with inner-city money. This is a brave experiment, but it is in danger of blowing up in the Minister's face.

In view of the fact that three authorities had their figures changed within a month, will the Minister say whether he has asked the Oxford people if they stand by their figures? Has he asked them to check the figures? Has he asked them for the statistics? The Leeds authorities want to see the methodology, but it will apparently not be available for two months.

We want to work constructively with the Minister to see whether there is enough common ground—even within the criteria, although I think that the criteria are wrong—to see whether the figures are as accurate as has been suggested. We want the methodology and all the details to be given the Leeds authorities. Will the Minister assure us that the statistics on asylum seekers have been taken into consideration? Will he say when the statistics date from? What does he suggest should happen, given that the statistics are already two or three years out of date, when we see the effects in the inner city over the next six years?

I am sorry that conversations between myself and the Minister, who is usually calm, patient and tolerant, were so cross. I am sorry if my language was extreme, but the problem in Leeds is extreme. A Labour Government should not operate social policy in that way. We cannot face the people of Leeds and say that poverty, which will still exist on 31 March, has disappeared.

Several hon. Members:

rose—

Photo of Roger Gale

Roger Gale (North Thanet, Conservative)

Order. A considerable number of Members still wish to speak. I propose calling the two Opposition Front-Bench speakers no later than 10.30 am. I would be grateful if hon. Members were to take recognisance of the time available, but it should be possible to accommodate everybody. I intend to give some priority to Leeds Members, but Justine Greening has been good enough to indicate her interest, and if I can call her, I will.

10:05 am
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Greg Mulholland (Shadow Minister, Health; Leeds North West, Liberal Democrat)

I congratulate Mr. Mudie on securing the debate and on leading on this important subject. It is a pleasure to follow him. He should not apologise for his forthright language and certainly not for his passion, which is shared across the political divide. He is doing his job, which is to stand up for our city.

As we heard, everyone is extremely proud of our wonderful city and its achievements and the fact that, economically, it has been doing very well over recent years. The hon. Gentleman spoke of the city centre, and we are all aware that there are areas of deprivation. That has to be a focus for us, for the city council and for the Government.

The neighbourhood renewal fund has contributed £63.421 million over the past seven years. The hon. Gentleman mentioned some projects, and I shall highlight a few. Leeds Voice, an interfaith project that works with groups and empowers local communities through a variety of schemes and initiatives, last year received 57 per cent. of its funding from the NRF. The "all relative" project works with parents of 8 to 13-year-olds at risk of antisocial behaviour—something else mentioned by the hon. Gentleman. The sports academy received £35,000 from the NRF last year; a sexual health link project received £109,000; and the Connexions youth project received £232,000. However, because of the change to the working neighbourhood fund, Leeds no longer qualifies for that money. All those projects will be at risk without that funding stream. None of the work done by those wonderful projects will be able to continue. That is of real concern to us all.

Mr. Hamilton, who is not in his seat at the moment, made the important point that, although some areas of Leeds are a particular focus, there is relative deprivation across the whole metropolitan area, something that is a little unusual compared with other core cities. One of the problems is that Leeds is to some extent a victim of its own success.

The hon. Member for Leeds, East and I share a dislike of the awful phrase "super output area", but we have to use it. We are talking about the fact that one super output area has led to us missing out on such a vital source of funding by the extraordinary margin of 0.04 per cent. We are talking about an arbitrary line. The message is clear. The Minister and the Government must reconsider how the funding is to be allocated, because at the moment it does not acknowledge the reality of the situation in Leeds. The scale and extent of deprivation in some parts of the city is clear and visible to all who visit.

Twenty-four authorities eligible for the new working neighbourhood fund have a total population smaller than the number of people living in the 10 per cent. most deprived areas in the country. It seems perverse that with a total of 149,000 people living in the most deprived communities, Leeds should be excluded. Surely, that cannot be right. Moreover, the city has more than 63,000 workless people, the fourth highest figure in the country, and worklessness is one of the criteria for the new fund. Despite the city's economic success, of which we are all extremely proud, there has been insufficient movement in the number of people living in deprivation—and the number of people on benefits—since 2001. The figure has remained largely similar, despite the emphasis on worklessness.

Leeds has a very good track record in delivering effective schemes through neighbourhood renewal funding. The partnership between the Government, the city council and the other organisations in the third sector has used that money in a way that is a model of how that type of essential regeneration funding can be spent extremely effectively.

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Justine Greening (Shadow Minister, Treasury; Putney, Conservative)

I think that the hon. Gentleman is hitting upon one of the reasons why this funding allocation is inherently flawed. It is the fact that it takes no account of the return on investment—in other words, how valuable the projects that the money is going to support actually are.

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Greg Mulholland (Shadow Minister, Health; Leeds North West, Liberal Democrat)

The hon. Lady makes an extremely valid contribution. This essential money has been focusing on the 3 per cent. most deprived areas in Leeds and it has delivered the type of returns that we have seen through the projects that have already been mentioned.

The wider problem is that the working neighbourhood fund that is being introduced is part of a wider financial situation in Leeds. As well as losing the neighbourhood renewal funding, Leeds will not receive any income from the local authority business growth incentive scheme. On top of that, of course, Leeds has this year received an extremely tight financial settlement, which has been acknowledged by the Minister.

We need to look at the comparison with other core cities. Next year, on average, the core cities will receive a 3.7 per cent. funding increase and Leeds will receive only a 2.8 per cent. funding increase. Indeed, the gap between Leeds and other West Yorkshire districts is even wider, with those other districts receiving a funding increase of 4.6 per cent.

However, it is when we look at the working neighbourhood renewal fund that the contrast is most extreme. Over the next three years, Leeds will receive £12.5 million before the funding peters out over that period, as has been explained. Meanwhile, Manchester will receive £85.6 million; Liverpool will receive £98.6 million, and Birmingham will receive a huge £114.4 million. Quite simply, the reality of Leeds and the deprivation that we face is not reflected in the funding that we will receive, and that is a real concern. It is something that those of us in Leeds from across the political spectrum, both MPs and those at local government level, simply will not sit down and accept. Overall, the net effect of these three funding issues is that next year Leeds will receive £8 million less than this year, which will undoubtedly have an effect on services.

I will wrap up my comments, because I know that there are other hon. Members who wish to speak. There is a strong and unified message coming from Leeds at all levels of political representation and that message was put in an extremely passionate and eloquent way by the hon. Member for Leeds, East. All of us in Leeds are saying to the Government that the arbitrary line that we appear to have just slipped over cannot be a sensible way to allocate essential sources of funding that we need to regenerate the parts of our city that need to catch up with the other parts that are doing better. We simply ask that the Government look at that issue again and come up with a way of allocating the new fund that is fair, commonsensical and, above all, based on reality, because I am afraid that this arbitrary line is not based on reality. The Government must look at the issue again.

10:13 am
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John Battle (Leeds West, Labour)

May I congratulate my hon. Friend Mr. Mudie and say that the city is grateful to him for championing this cause, because it is an absolutely crucial one? He speaks with passion, with experience and also with knowledge. He might not recall this, but he taught me a good deal about politics years ago when we were together in the council. One of his watchwords was that politics is about the arithmetic and justice is in the detail of the arithmetic. I know that he has examined carefully the impact of this particular decision on some 200,000 people in Leeds.

In following Greg Mulholland, I am tempted to say that I completely agree with him and that, in a sense, we suffer because Leeds is too big. Perhaps we should take what might now be described as the Kosovo option and make a unilateral declaration of independence in all our urban villages. Some of our urban villages, such as Seacroft, Armley, Wortley and Kirkstall, are larger than some of the towns that are now receiving renewal funds. So perhaps we should atomise the city, localise and apply separately as urban villages. That is the irony of our current position.

I would just say to the Minister that statistics are significant and statistical differences are sometimes minimal to statisticians, but they have a massive impact on people's lives. That is the gap in this debate. Perhaps in contrast to the hon. Member for Leeds, North-West, I want to say that I can remember the days when there were cuts of 10 or 15 per cent. in budgets to Leeds every year. At least under this Government the overall budget for Leeds is increasing and that should be acknowledged.

We are talking about a particular pocket of funding, which has been renamed the working neighbourhoods fund to focus on getting people into work. The irony is that that budget, which has been cut, is precisely the budget that needs to be supported if we are to avoid having what I would describe as a dividing city—it is an active process; it is not over. The city centre has an 8 per cent. growth rate, with new jobs being created, but not everyone is joining in that growth. People without skills and training in my neighbourhood, which has the lowest number of people going into further and higher education of any constituency in the country, still need support in education and training.

My neighbourhood is that cake slice going out from the city centre that makes up Armley, Bramley, Wortley and Kirkstall, out towards the ring road in Bramley. It starts with the terraced streets with the washing outside; it extends through the council estates; then there a few semi-detached houses; and then it is life beyond the ring road. In terms of output and deprivation, I would describe those four neighbourhoods as Nos. 12, 13, 14 and 16 in the overall needs pattern of the city. If we were to take a compass and draw an arc at the bridge at Kirkstall, those inner neighbourhoods would come No. 1, No. 1 and No. 1—two of those super-output areas are the highest in the whole country.

Let me explain what happens in relation to boundaries. The super-output areas still have high unemployment in the terraced houses. According to Dr. Susan Lawrence, schizophrenia rates around Leeds prison are 10 times higher than the national average. The Government are now saying, "Of course we want to get people off incapacity benefit and into work and we passionately want to do that because it's good for those people." But how can we achieve that if the very resources to help us to get people off incapacity benefit and into training and work are taken away?

I am trying to become an expert on super-output areas. Why? It is because everything depends on where the boundary is drawn. We know that as politicians, from drawing up polling areas and the rest of it. That line across a street can be crucial. Let me give an example of what happens to the figures. I will find that 0.04 per cent. for the Minister, and I will tell him why.

New Wortley was moved from the constituency of my right hon. Friend Hilary Benn, where it was in Holbeck ward, which is a high-output area. Its removal lowered the output in his area, but it was put into the better neighbourhood in my area of Armley and Wortley. The figures were therefore submerged by life out towards the ring road. Overnight, that super-output area went from being the top target neighbourhood to being one of the lowest. Did the people move? No, but one person moved, from Heeley in Sheffield, and said, "I have come to a neighbourhood that's worse. If I had remained in Sheffield, I would have been in the super-output area that got access to the money. So I have moved away from the money and come into a poorer neighbourhood." I simply make the point that, with increasing mobility, it cannot be right that people either do not move and end up with nothing or do move and end up even worse off.

Let me say to the Minister something about that shift, that redrawing of the boundary for New Wortley. It is welcome and the councillors have worked with that neighbourhood to build up a community centre, and to try to get training there. But what do they find? The very budget that supports that community centre and that training to get people into work is now being taken away. That cannot be right. I will just draw on this one example, but there is little point in other Ministers telling us that people on council estates ought to be given training and put into jobs, and suggesting that training is provided in community centres in the neighbourhood, if the resources to do that are not there or are even being taken away.

Leeds, West had the West Leeds Family Learning Centre, which was built up when my hon. Friend the Member for Leeds, East was Leeds council leader, from the germ of an idea to help people in a neighbourhood of high unemployment and low skills and training. We have the lowest aspiration in the city, with many single parents, especially women, and many unemployed people. That training centre provided by the council used the new deal of the Labour Government well: 293 people a year were training there to gain skills, and people ended up going in the direction of university or running Sure Start projects as a result of that training.

But what happened? Only a year and a half ago, the Government decided to put the training centres out to tender. Unfortunately, the council did not win the tender; it was won by a company in Bradford, and the consequence was that the only training centre in my whole constituency was closed down. Yes, a centre has opened in another part of town, but people cannot get to it on the bus, and when I checked how many young men and women from Leeds, West are now being trained, I found that it was two a year, not 293.

There is no training facility in my neighbourhood. Where will the money come from to rebuild it? I agree with the Minister for Housing that we should put training back in the New Wortley and Fairfield community centres, where the people are. We should do what those centres were doing, line up local employers, and make them family-friendly so that people can take their kids to school and walk to work. We were doing all that work before, but it has been dismantled. We should put it back in those centres, but which programme do we look to? We look to the new working neighbourhoods fund. Why? It is more flexible than Jobcentre Plus and can deliver locally to local communities. It can work with local employers in the way that I described. But what has happened? We now have no access to it at all.

Leeds now has 63,000 people without skills and training, and the numbers are increasing. My constituency has moved up the table, and Leeds, Central, Leeds, East and Leeds, West have some of the highest figures in the country for people without skills and training. Of course we have done something on low pay, and of course we have more people in employment, but we are still miles behind on skills and training, and the working neighbourhoods fund is precisely what we need.

The irony of the situation is that the fund is called the working neighbourhoods fund. If we take away that money, there will not be more work, and people will be condemned to live on benefits. We will have more difficulties getting people off incapacity benefit and getting them into training schemes or suggesting further and higher education. As it is, we have an almighty struggle to get facilities in the neighbourhood that people can get to. The city is clogged up by transport problems, so people cannot cross the city to go to jobs elsewhere; they are physically locked out and cannot get down the dual carriageway from Stanningley or down Tong road into the city centre in the morning. Getting into work is not doable without a two-hour daily journey.

Providing work in the neighbourhood means providing training in the neighbourhood and working with local people, and that means providing the budget to back things up. This is a small budget in terms of the overall city budget. Although the settlement is tough, it is better than what we had under the Conservative Governments, and it is at least increasing. The piece of the jigsaw that we are talking about is vital to tackling poverty in the round. The key to tackling poverty is getting people into work and training and supporting them. Without that, we will go backwards, not further forwards.

In that context, I hope that the Minister will think again. It is a sick irony that we now have a new working neighbourhoods fund to replace the neighbourhood renewal fund. Yes, there is a good focus on work, and there needs to be a focus on work, but, sadly, the means to introduce change are not there. If such means are not put back, we will go backwards.

10:23 am
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Justine Greening (Shadow Minister, Treasury; Putney, Conservative)

I thank you, Mr. Gale, for giving me the chance to take part in the debate. I am not a Leeds MP, so I shall be brief because I do not want to eat into the time available to MPs from the area.

I recognise many of the issues that have been raised, because we face them in my part of London. We, too, have seen the withdrawal of the neighbourhood renewal fund and the deprived areas fund, and I recognise the absolute frustration felt by local MPs. They know that, with support, there are opportunities to achieve something for particularly deprived parts of their constituencies, but they will simply not get that support because there is no access to the necessary money.

I want to make two brief points. The first relates to the neighbourhood renewal fund and the deprived areas fund, which have now been combined into the working neighbourhood fund, with a collective fall in funding of £88 million. If it is believed that such funding works and that such investment achieves a positive return for the communities that it goes into, why is it being cut? How can that be a sensible decision?

My other point is that, although it is appropriate to start with the statistics for deprivation in areas where the Government want to target the money, they must surely look at the quality of the proposed investment projects and at what the money will be spent on. My frustration relates to the fact that investment can take two forms. We can have projects that are already up and running and which local people feel are valuable, as Leeds MPs have effectively articulated. However, regeneration opportunities could also be coming down the track, and careful Government support could make the most of them for local communities. There is a lack of thought on the supply side about what employment prospects there are and about the projects that are being supported by such money.

To conclude, local authorities seem to drop off a cliff and to get everything or nothing. That is not a sensible way of looking at how to apportion funds.

10:25 am
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Colin Burgon (Elmet, Labour)

Although my constituency is called Elmet, it lies entirely within the Leeds boundary. I pay tribute to my hon. Friend Mr. Mudie for raising the issue and particularly for arguing his case with passion and conviction. In that, he was echoed by my right hon. Friend John Battle.

My right hon. Friend and my hon. Friend enjoy many advantages over me, including the fact that they used to be Leeds councillors. The only advantage that I enjoy over them is that I was born in Leeds and have lived my whole life there. I have watched with interest the development of the Leeds economy, and it is something about which I feel very committed. The trend in Leeds is summed up by the collapse of manufacturing industry. Up until about the 1970s, clothing, textiles, engineering and, in my constituency, mining offered good, well paid, secure jobs to the vast majority of people in Leeds. The collapse of manufacturing in the 1970s brought about a dramatic change in the city's social structure and the beginnings of what has since become a fundamental generational issue. We now have neighbourhoods that have never seen permanent, good, relatively well paid employment, and that is a tough nut to crack.

On the other hand, there is the picture of Leeds as a booming city, which has a financial sector with banking, insurance and so on. However, huge areas of the city do not benefit from such developments, and although that does not include my constituency, I am still committed to tackling such issues as a Leeds person. In effect, we have developed an hourglass economy, and the market will not address that structural problem, which is why the role of local and national Government is so important.

I do not want to go on too long, because I am conscious of your decision to call the Front-Bench speakers shortly, Mr. Gale. However, the key factor arising out of the debate, as has been mentioned, is that 149,000 people in Leeds are designated as deprived. Some 63,000 workless people live within the Leeds boundary, giving the city the fourth-highest concentration of workless people in the country.

We have talked about lower super output areas, which is a real mouthful, and we have been told that Leeds misses out under that criterion by 0.04 per cent. I have a number of questions to which I hope that the Minister will apply himself, because, as my hon. Friend said, the Government's decision means that Leeds and Leeds citizens will lose £42 million over the next three years.

I know the Minister to be a sensible, caring and intelligent individual and I ask him whether there is not a case for building a margin of error into the Government's calculations, or for rounding figures up when they are so close to the 20 per cent. Could there not be a banding system? In this clash of the titans between the Minister and my hon. Friend, that might be the sensible middle ground, around which we can all gather, reach a deal and move things forward for Leeds.

What consultation did the Government undertake when they decided how the funding would be allocated? How did that compare with the consultations that took place on the allocation of the NRF funding? The key question, which has been raised by my comrades and by other Leeds Members, is why we are the only major city that does not get working neighbourhood funding.

I want to finish by saying that we are not paranoid in Leeds. Often people in the rest of Yorkshire feel envious of us. It may well be that there is a certain quality about Leeds people that puts us ahead of others. The point is that we are arguing today for fair funding for Leeds people. The Minister should address that, and I hope he will.

Photo of Roger Gale

Roger Gale (North Thanet, Conservative)

I thank all those hon. Members who have participated for adhering to my request for brevity. We should now have adequate time for the Minister to offer a full response to an important debate, as long as the Opposition Front-Bench Members exercise similar restraint.

10:30 am
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Lembit Ípik (Shadow Minister (Housing), Department for Communities and Local Government; Montgomeryshire, Liberal Democrat)

I shall certainly accord with your exhortation to brevity, Mr. Gale.

At the heart of the debate, it seems, is a discussion of the fashion for formulae. I think that that is something that has eroded the quality of Government in recent times. The issue is over-reliance on those formulae, and under-reliance on the responsibility that every Government should embrace for decision making that takes an empathic view of the consequences that the formulae would impose. I love formulae. I am really a physicist at heart, and I have no doubt that mathematics and the formulae that it provides are very important for Government. However, we are dogged by bad formulae at the moment. The Barnett formula for allocating funds to Scotland, Wales and Northern Ireland is so bad that Joel Barnett, its progenitor, says that it should be abolished and changed. Objective 1 funding has displayed the same kind of catastrophic failure to think about the consequences of minuscule percentage changes in local circumstances. Indeed, my own constituency lost, by a tiny percentage, tens of millions of pounds, very much as Leeds seems to be suffering now.

The formula that is under discussion today may again be wonderfully precise mathematically, but it completely fails to consider the human consequences of that precision. The victims of that mathematical fluke are the people of Leeds. We heard from Mr. Mudie that 95 areas qualify, but the bar is 96. As Colin Burgon said, 0.04 per cent. is a rounding error that in any normal circumstances would be considered to be zero. Yet that small change will affect 63,000 workless people in Leeds, and 149,000 people who are considered to be in a deprived circumstance.

We have heard already that that will lead to the exacerbation of serious social problems, through the shutting down of many projects. My hon. Friend Greg Mulholland made it clear that a huge number of specific and well intentioned projects, which make a difference, will be lost for the sake of that rounding error. In a passionate and considered speech, John Battle again pointed out the ludicrous nature of the mathematical formula being used to make the cut. He suggested that by atomising the city into urban villages one could play the same game—and indeed one could. We might as well accept that if the mechanics of social policy are no more complex than a Rubik's cube we should move the boxes around until we find exactly the out-turn that would mean falling within the terms of the imposed formula. That is how I see the difficulty before us.

The challenge for the Government is not mathematical; it is political. If we are really so sure that formulae work, we may as well do away with Ministers and leave the government of the country to accountants. However, I believe that that is not the Government's intention, and I have to believe that the Minister will be able to assure us that he empathises, to the extent of being able to agree that what has happened is a ludicrously random, arbitrary and unfair way to determine the future of the inner-city elements of Leeds.

Let us consider again what the hon. Member for Elmet said: the decision can quite legitimately be considered as a rounding error. I wait to see why the Minister is so sure that the figures are so precise that he can know the figure of 0.04 per cent. is reliable within the bounds of variation. I joined the Liberal Democrats in 1990, when the papers said that our poll rating was 3 per cent., with a statistical variation of plus or minus 4 per cent., so I have been pretty sceptical about statistics ever since I joined a party that was in theory at minus 1 per cent. in the polls. I want the Minister to explain why he is so sure that the precision of the figures being used now is better than that of those polling calculations, or other calculations that are open to doubt.

I want to add my own questions for the Minister. First, does he feel that the Government are imposing a common-sense situation on Leeds with the loss of all the money? Secondly, does he recognise that the anger that has been described by Leeds Members of Parliament is not necessarily anger with the Government, but comes from a pride that those colleagues obviously feel, and frustration that the Government seem to be failing in their duty to exercise political judgment in simply depending on a mathematical formula? Thirdly, why does the Minister think that it is reasonable for finance to be switched off like a light, even though it is obvious that the deprivation is real and present, and pretty much at the same level that it was at when the millions were being handed out?

Lastly, is the Minister willing to reconsider the matter, perhaps by meeting with the Leeds Members? I would not need to attend that meeting, because I am speaking now on behalf of my party, against what I believe to be an injustice. At the very least, I hope that the Minister will say that on consideration he will have a non-confrontational meeting with the Members of Parliament for Leeds constituencies who want to make their points clear, and that it will be a worthwhile meeting—a genuine consultation, and not another opportunity to explain to the Members why the decision is "clearly right". If the Minister does that, there is hope for progress, but let us recognise that the decision that has been made is based on a rounding error. If the Minister does not reconsider, the cost, beyond the loss of good will, hope and opportunity, will in all probability be economically greater than the saving that he thinks he will make.

10:37 am
Photo of Stewart Jackson

Stewart Jackson (Whip, Whips; Peterborough, Conservative)

I congratulate Mr. Mudie on securing the debate and on his sincerity and the heartfelt case that he made. He and his colleagues are a credit to the city that they represent. They are obviously concerned about the fact that the city will not continue to receive working neighbourhood funding.

Clearly, the work that has been undertaken in the past in the areas that have been mentioned, such as jobstart schemes, the work of neighbourhood wardens, and burglary reduction has made an impact on the quality of life of the hon. Gentleman's constituents. Few would argue about whether that work was needed. I noted that his constituency has the 47th highest rate of unemployment in the United Kingdom, and that in Gipton and Harehills ward 47 per cent. of children were living in households on benefits and only 31 per cent. of pupils left school with five or more GCSEs in 2005. However, that is not an issue that affects only West Yorkshire. My hon. Friend Grant Shapps recently discovered, through a parliamentary question, that there are no fewer than 21 local authorities in the same situation as Leeds: that is, having received neighbourhood renewal funding previously, they will not now receive working neighbourhood funding. In fairness, not all of those will have transitional funding at the level that Leeds will.

Far be it from me to help the Minister, although I know that he had a late night last night—half-past 1, I think—but the hon. Member for Leeds, East could be accused of gilding the lily slightly by focusing on just one of the criteria, which was the 20 per cent. figure for lower super output areas. He will know that two other criteria are used in allocations. However, it might be, of course, that he was taking issue with the wider problem of the methodology used by the Office for National Statistics. We could be here all day discussing that matter, on which I think that there is consensus, as was mentioned by, among others, Greg Mulholland and my hon. Friend Justine Greening.

In fairness, as was explained in a parliamentary answer last year, between 2001 and 2007, Leeds, East received £1.95 million of discrete funding via Yorkshire Forward, and that does not include the single regeneration budget sums allocated to Leeds, East. That said, Leeds residents are entitled to feel aggrieved by the Government's high-handed attitude. The revenue support grant increase of 2.8 per cent. this year threatens a serious cash shortfall, according to the city council's deputy leader, Councillor Richard Brett. Inevitably, that will mean service reductions and above inflation rate council tax rises. In addition to the loss of neighbourhood renewal funding, the local authority business growth incentive scheme has also been axed, removing £10 million of funding from council coffers.

Yesterday, we read in the Yorkshire Evening Posthow the hon. Member for Leeds, East felt moved to comment on the duplicity of the Department for Transport in recommending only small-scale transport infrastructure for Leeds while putting forward a massively costly project in Manchester, which even Graham Stringer called a "hugely expensive white elephant". No wonder the hon. Member for Leeds, East felt moved to say:

"Manchester has been treated better than Leeds in terms of everything. I do not understand it. I am cross about it really - transport is just another example."

Time and again, with this Government, we find ourselves in a situation where funding is hailed in a great fanfare one year, only to be ripped out of a community the next after yet another departmental rethink. When will the Government learn that continuity and stability are keys to community development and renewal across the country? Irrespective of the merits of the arguments for the neighbourhood renewal funding and the working neighbourhood funding criteria, I would be interested to hear from the Minister what the administrative costs were of migrating from the old funding stream to the new.

The Government are well known for their five and 10-year plans and for their insistence that local authorities should plan for the long term, yet it appears that authorities do not know, from one year to the next, how much funding they are to receive. That point was touched on by other hon. Members. How are large metropolitan areas such as Leeds supposed to plan for the long term if they are constantly susceptible to the year-on-year, see-sawing of ring-fenced grants?

Hon Members in West Yorkshire will be familiar with the sorry saga of the Leeds supertram project, cancelled in favour of a bus rapid transport system, which seems to sum up the Government's casual waste and complacent attitude to taxpayers' money. Both the National Audit Office and the Yorkshire Post, with its admirable road to ruin campaign, have highlighted the £3 million of taxpayer-funded money wasted on this project for seemingly dubious reasons.

Along with my concerns about the incessant changing of funding streams and allocations by this Government, I would like to draw hon. Members' attention to what I would describe as the overcomplicated interconnections between funding streams, which was brought out by the hon. Member for Leeds, East. We are often told, "You have missed out on y funding, because it is connected to x funding". He made the point earlier about how significant additional funding streams appear on the surface to be directly linked to working neighbourhood funding in respect of issues such as migration and funding from the Department for Work and Pensions. Something surely must be done to simplify this convoluted system or we will end up with permanent and entrenched winners and losers where it is literally "winner takes all".

Conservatives believe that regeneration is a social responsibility and want radical reform of regeneration funding and a clear rationalisation of the vastly inflated and unnecessary number of funds. However, that must be done through a systematic and sensitive programme. We will reduce the number of delivery vehicles causing delays and confusion of direction and accountability and, as I alluded to earlier, provide a stronger role for elected local councils. We will radically overhaul the flawed pathfinder scheme, which is resulting in the unnecessary demolition of Victorian terraces in North-East and East Yorkshire and profits for speculators, reinvesting the funds in genuine locally led regeneration schemes. Furthermore, we will allow local communities to introduce new social enterprise zones to promote social enterprises and to help disadvantaged communities.

Over the last 10 years, and certainly the last 20, there has been a great opportunity for places such as Leeds to do something systematic and profound about welfare dependency. Instead, owing to unfettered migration, as alluded to by hon. Members, we have entrenched welfare dependency for short-term benefit. That has been felt across the country.

The final report from the Cities Task Force on urban regeneration, under the chairmanship of Lord Heseltine, is eagerly awaited by hon. Members on both sides of the House. Without wishing to pre-empt its findings, it is well known that the Opposition want a great deal more money collected and spent locally. Local authorities need to be given the freedom and responsibility to raise and spend how and when they see fit. They must not be forced into short-term, ring-fenced spending that benefits no one. That is not a view shared by Opposition politicians only. Even the opposition Labour leader on Leeds city council, Councillor Keith Wakefield, has argued that his Labour colleagues need to rethink their business rates policy and to look at returning locally raised money to local councils.

The real issue is welfare dependency, which, after all, is at the hub of much of the requirement for urban renewal. Here Government failure is rife: child poverty rose by 200,000, after housing costs, in 2006.

Photo of Colin Challen

Colin Challen (Morley and Rothwell, Labour)

I would be interested to hear whether the hon. Gentleman has any influence in Leeds city council, which is a Conservative-led body. It recently raised tens of millions of pounds through the sale of Leeds Bradford airport. It should spend that money tackling deprivation by providing better transport throughout the city and, perhaps, even a bus station in Morley, which we do not have, despite being a town of 25,000 people. That would help to get people into work with more mobility. Will he write to his colleagues on the council and urge them to do that?

Photo of Stewart Jackson

Stewart Jackson (Whip, Whips; Peterborough, Conservative)

I would be delighted to visit and speak with my colleagues on Leeds city council. The Leeds administration is a breath of fresh air. In the spirit of consensus, I find it refreshing that it is sticking up for Leeds in the way that it sees fit, as are hon. Members today, without fear or favour of the party in power.

Some 2.8 million people are claiming out of work benefits and 15 per cent. more young people are not in work or full-time education than was the case in 1997. The number of people in severe poverty increased between 1997 and 2005. The Government should be concentrating on upskilling the population to allow people to escape the trap of welfare dependency, to become home owners, to participate in the democratic process and to make a worthwhile contribution to their local community. Rather than funding following the problem, it should be going to the root of the issue.

Investigation must also take place into the possibility of competitive bidding for funds. Failing authorities—of course I do not include Leeds in that category—should not always be propped up by Government money. Good money should not always follow bad. Some local authorities, just like some Governments, use public funds in much more efficient ways than others and they should be rewarded with more funding and flexibility.

I commend the hon. Member for Leeds, East, who is an experienced and well respected parliamentarian, for putting the interests of his constituents before the need to toe the party line. It is for him to have a debate with his party colleagues during the time that they have left in government. It is not for me to comment on the merits of whether Leeds or any other local authority should receive local neighbourhood funding; there will always be winners and losers in such an exercise, and it would be inappropriate, when the criteria have been set, for me to comment. However, the bigger, strategic issue is whether the Government's horrendously complex and convoluted funding process is fit for purpose. Members will not be surprised to hear that I believe that it is not. Under a Conservative Government, it will be simplified, and we will end ring-fencing and the regionalisation of local government. The renaissance of cities such as Leeds will be about restoring authority, autonomy and civic pride to local government, and it will have their people at its heart.

10:50 am
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John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

I follow Mr. Jackson, although I have less time than he took. I shall do my best to respond to my hon. Friend Mr. Mudie, whom I congratulate on securing today's debate, and to the points raised in today's debate. He has been strongly supported by my right hon. Friend John Battle and my hon. Friend Colin Burgon. The Leeds MPs tend to hunt in a pack, and my hon. Friends the Members for Pudsey (Mr. Truswell) and for Morley and Rothwell (Colin Challen) are also present.

I understand completely the strength of their pride in Leeds as their city, and how strongly they feel about its prospects and the problems that it still needs to tackle. I am ready to discuss in detail the working neighbourhoods fund decisions that I have taken, and the potential for a range of other funding sources that will go into Leeds to help deal with regeneration in the next few years. However, I am prepared to do so only on the basis of the facts, to which I shall return in a moment.

My hon. Friend the Member for Leeds, East knows that we published the sub-national review of economic development and regeneration in July 2007, which was followed by extensive discussions. We set out the view that there has been massive progress in dealing with areas of disadvantage and deprivation over the past 10 years, but that there are deeply entrenched and persistent pockets of deprivation and that the future of any regeneration funding that followed the neighbourhood renewal fund would need to be more intensively focused on fewer areas, distributed on the basis of neighbourhood-level analysis, which is more finely tuned than ward level, and more sharply focused on the factors that help drive and regenerate the economy, in particular worklessness and enterprise, which my right hon. Friend has recognised.

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John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

I shall just finish this point.

My hon. Friend the Member for Leeds, East has rightly said that work is the main way out of poverty for people, because it provides greater dignity and independence not only for the person who gets and stays in the job, but for the whole family and the wider community. I shall give way to my right hon. Friend the Member for Leeds, West, and then I shall deal with the points that have been raised in the debate.

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John Battle (Leeds West, Labour)

I want to pick up on the word "pockets", because I do not want the Minister to be seduced by the idea that there are just tiny pockets of deprivation. My hon. Friend the Member for Leeds, East has introduced a way of examining areas in detail through the benefit system to show that a lack of training, skills and jobs is increasing, not decreasing, in substantial areas of the inner city under this Government. That is the problem, and simply to say "pockets" suggests that there is just a bit of mopping up to do. The situation in the inner cities is getting much worse.

Photo of John Healey

John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

I do not mean to imply anything by saying "pockets". I want to say—I mean this, because I have studied the figures—that there are areas of disadvantage that we have not shifted in the past 10 years, despite successful and massive investment, so we must do things in a more concentrated way and a bit differently. In particular, we must concentrate on worklessness and skills in the local economy, and I shall come on to that issue.

There are at least four points on which I must set my hon. Friend the Member for Leeds, East straight. He has said that the partnership arrangement between central Government and the city, which has been in place for more than 30 years, has been ended by that decision. That is not true, and I do not accept it. He said that the working neighbourhoods fund was the only investment in regeneration—especially through work—that would have gone to Leeds. That is not true, and I do not accept it. He said that no resources will go to the city in the next three years to help people become skilled and get into work. That is not true, and I do not accept it. Finally, he said that people in the remaining deprived wards are of no interest to the Government. That is not true, and I do not accept it.

I shall examine the expectations in Leeds on future funding for regeneration with my hon. Friend, but it is important that he understands that I cannot accept the council's expectation of either £54 million or £52 million under the working neighbourhoods fund, if the council had been eligible. I shall also examine with him in detail whether the figures that we have used as the basis for decisions on the working neighbourhoods fund and the methodology for eligibility are accurate. I have checked and re-checked those figures, and I have had independent figures check the Oxford figures. I shall let him and the council have the figures and the detail of the methodology by the end of the week.

I understand that my right hon. Friend and hon. Friends are upset that Leeds has lost out by failing so closely to meet one of the three eligibility criteria, but my hon. Friend will understand that when taking any decisions, there must be a consistent basis for allocating funding. Once that basis, threshold or formula is set, it must be applied consistently, which is what I have done in the case under discussion. Leeds, like 21 other local authorities, including my own in Rotherham, has not qualified for the working neighbourhoods fund as it did for the neighbourhood renewal fund. In many ways, however, despite the remaining regeneration challenges and deprivation in Leeds, that is testament to the success of the city and some regeneration efforts.

Leeds has fewer neighbourhood areas—the lower super-output areas—among the most deprived 20 per cent. areas in England. In 2004, it had 151 such areas; last year, the figure was down to 131. At the same time, there has been an increase in the number of areas in Leeds among the top 20 per cent. least deprived areas: the figure was 56 in 2004, and 75 in 2007. The number of children in workless households over the past three years has reduced at a faster rate than throughout the country. It is still higher than the average throughout England, but it has reduced at a faster rate than the rest of the country, which is testament to some of the efforts and success in Leeds locally. The working neighbourhoods fund situation is not a product of statistical blips.

On the neighbourhood renewal fund, we were clear from the outset that it was time limited and coming to an end. My hon. Friend's city authority received £63 million from that fund from 2001 to 2008. As a former Minister, who was responsible for setting up the Learning and Skills Council, he will appreciate the following point better than most: we have always said that in the end, the key issue is about the way in which one mainstreams funding programmes and the work of mainstream agencies to one's regeneration efforts; the issue is not simply about the funds that are invested.

In order to avoid the cliff to which Justine Greening has referred, we are providing transitional funding, including some for Leeds and the other 21 areas that qualified for neighbourhood renewal funds but not for working neighbourhoods funds. There are several areas where funding not only has gone in, as my hon. Friend has rightly pointed out, but will go in over the next three years.

Photo of John Healey

John Healey (Minister of State (Local Government), Department for Communities and Local Government; Wentworth, Labour)

No. I have less than a minute. The hon. Lady should talk to the hon. Member for Peterborough about that.

The area-based grant has no strings attached, and it is worth £49 million to Leeds next year. Leeds is one of only 29 areas that receive local enterprise initiative funding—£15 million. There are also Jobcentre Plus, special programmes including the new three-year pathways to work programme for Leeds, European funding, single regeneration budget funding, regional development agency funding and new local authority business-growth-incentive funding for next year. Furthermore, through the local area and multi-area agreements, there will be a chance to pull those measures together, and put pressure and a duty to co-operate on other agencies, which has not been possible before. Those measures potentially put the council in the driving seat, and I hope that it will work with me to ensure that the priorities of worklessness, skills and regeneration are tackled in Leeds.