Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Orders of the Day — Local Government Finance

Part of the debate – in the House of Commons at 5:50 pm on 1st February 1995.

Alert me about debates like this

Photo of Frank Dobson Frank Dobson Shadow Secretary of State for Environment, Food and Rural Affairs, Shadow Minister (Culture, Media and Sport) 5:50 pm, 1st February 1995

You will be familiar, Mr. Deputy Speaker, with the fact that one of the reasons why Westminster is in such a good seam at the moment is that skulduggery and fiddling in the past have allowed the council to build up enormous balances. In many cases, those balances exceed the amounts of expenditure which some councils can look forward to in the coming year.

I now return to the report, written when Westminster started building up those balances. It was reported to Lady Porter that the Secretary of State—then the Minister of State—would be particularly conscious that, with safety nets, a number of high-spending Labour London boroughs would appear to get off the hook with community charges "lower than Westminster". The Tories then set about making sure that those community charges "lower than Westminster" did not come about.

Westminster will have to be given very large sums of money this year to make up for the millions of pounds that have been lost within the council through corruption and incompetence. That is not just a matter for Westminster, because the extra funds which are constantly found for that council and which, it is proposed, should be given to Westminster in this settlement, are taken from the funds available to councils elsewhere. That is in not just the rest of London, but the rest of the country. Every other council gets less so that Westminster can get more.

At a previous Question Time, my hon. Friend the Member for St. Helens, North (Mr. Evans) drew attention to the rather unfair treatment of St. Helens compared with Westminster, despite the fact that they have about the same population. My hon. Friend will give further details if he manages to catch your eye, Mr. Deputy Speaker. St. Helens receives £104 million in grant from the Government while Westminster receives £194 million. The grant per head for St. Helens is £578 and the grant per head for Westminster is £1,024.

It could be argued that, as St. Helens is not in central London, those figures are not strictly comparable. As the Secretary of State seems to be obsessed with the London borough of Camden, let us compare Camden with Westminster. Both boroughs are roughly the same size, geographically and in terms of population, and are adjacent to one another. Virtually the only difference is that more rich people live in Westminster than in Camden. One would think, therefore, that Camden would get more money than Westminster, but that is not so. Westminster receives £194 million whereas Camden receives £178 million. Westminster will have got nearly £16 million more in this settlement. It got £21 million more in the year that is coming to an end and £20 million more the year before that. However, that clearly does not have a direct effect on performance because, as the Secretary of State's officials can confirm, the Audit Commission's indicators show that Camden is better run than Westminster.

How has the grant been rigged to benefit Westminster at the expense of everywhere else in England? Some time ago, Westminster received £7.2 million to spend on flood defences. It spent £700,000 and therefore had a kick-back of £6.3 million. It was also given £2.2 million to give a grant to the English National Opera and the English National Ballet. It gave £200,000 and kept £2 million for itself. That is £8 million to start off with, which others should have received in a fair system. However, the swindling is much more systematic than that. The special weighting for tourists was doubled at one stage to £5.3 million. The standard spending assessment for Westminster includes a £54 million allowance for the extra cost of visitors.

Another special factor is at work in Westminster, which, for some reason, is not allowed for in the SSA. In the current year, Westminster receives more than £20 million in income from parking charges, and that sum is expected to be more than £30 million in the forthcoming year. One would expect a Government who are so concerned with public spending to abate or to reduce Westminster's grant to reflect that massive income, which is not available to other councils. Instead, Westminster is allowed to keep every bit of it. It is a racket: extra money for visitors is not offset by the money that visitors bring in. Moreover, it has all been done as part of a political swindle.

Why was that necessary? First, it was to keep the poll tax down; secondly, it was to keep the council tax down—