Local Government Finance

Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 6:05 pm on 3rd February 2010.

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Photo of Neil Turner Neil Turner Labour, Wigan 6:05 pm, 3rd February 2010

Thank you, Mr. Speaker. Perish the thought that I would ever do anything to earn your wrath and ire.

I shall provide a couple of examples of what the three-year funding certainty has given us. First, on housing, we have 26,000 council houses in Wigan, and every single one has been brought up to the decent homes standard. We have been able to do so not only in the public sector, but in the private sector, where many thousands of houses have also been brought up to that standard. That is largely due not only to Government money, but to the certainty of being able to plan year on year.

Secondly, on education, we have been awarded a Building Schools for the Future programme in Wigan. That has now started, and we have a programme to rebuild every secondary school in the borough. I should also mention three primary schools: Canon Sharples, Woodfield and Westfield. For years under the Conservative Government, pupils at Woodfield were taught in timber huts, where in winter they were freezing and in summer they were sweltering. We have totally rebuilt that school under a Labour Government, and shortly we will start on Beech Hill primary school.

Most importantly of all, throughout the borough we have 19 Sure Start centres. These are not just glorified nursery schools; that is only part of the job that they do. They are also places where parents learn parenting skills. We do not live in a broken Britain-a silly, trite phrase; if one did not know better, one would think it was thought up by some second-rate advertising trainee-but we do live in a Britain where there are people and families who have very difficult problems, and Sure Start is one way of addressing those problems. Mums-many of them are 15, 16 or 17-year-olds-who come from dysfunctional families can go to Sure Start centres and start to learn how to be good parents and how to be communicative beyond their small peer group. They can learn social skills and, equally, the skills that can get them into work once their parenting responsibilities are less onerous.

Sure Start is absolutely essential to the long-term programme to give children from dysfunctional families, and those families themselves, a better start. They benefit from going from these facilities into much more modern primary schools, and then into modern secondary schools built under this Labour Government's Building Schools for the Future programme, which the Conservatives have not yet said that they would continue with in government; in fact, as I understand it, they would reduce it dramatically, if not scrap it completely. This is a whole package of long-term reform that will reap rewards not only next year but 10, 15 or 20 years down the line. It would be class vandalism for any party to stop or reduce any part of that investment in our people's future.

We have come a long way, but we could go further. We should implement not just a three-year settlement for local government but a rolling three-year settlement so that every year people will know three years in advance how much money they will be getting. Local government would then be able to plan even more effectively than it does now. I understand that it is not for the Department for Communities and Local Government to make that decision-it needs to be decided throughout Government, and with Treasury agreement. However, it would enhance local government's ability to deliver its services more effectively and efficiently, and there would be benefits to the public good as a result.

With local area agreements, relaxed targets, Total Place agreements between councils, and health trusts, we have come a huge distance, but we need to go further. The council tax system is inherently unfair. It was designed to be unfair, so producing such a system was one of the few things that John Major managed to succeed in. It surely cannot be right that a millionaire old Etonian in Notting Hill pays only three times more in council tax as a minimum wage earner pays for the same local services. I personally like banding. It is simple to understand and to administer, but we need to reform it. We need more bands at the bottom and more bands at the top-an open-ended banding at the top, I would suggest-so that, as my hon. Friend Dr. Starkey said, the amount of money that is paid more accurately reflects the income of people and their ability to pay for those services.

Revaluations should be carried out on a regular basis. We should never have cancelled them in the first place-we should have gone on with them at the beginning of this Government and done them again since. As Julia Goldsworthy said, if we do not do this we will bring the whole system into disrepute; it will become similar to the poll tax in having to be totally reviewed in future. We can do that revaluation-it is not a difficult exercise. Every month building societies tell us by how much house prices have risen or fallen over the period. If they can do that on a monthly basis, I do not see why the Government, via the Valuation Office Agency, could not do it every four or five years. Let me reiterate what my hon. Friend said, because it did not seem to have any impact on the Conservative spokesperson. This is a zero sum game. Having a revaluation does not mean that local authorities will get more money. They may choose to get more money from it, but that is a different issue and a different argument. Some people will pay more, and some will pay less. It is important that there is some kind of damping effect in revaluations so that those who pay more are not suddenly faced with 10, 15 or 20 per cent. increases but they are brought in gradually. It is absolutely essential that we have revaluations if we are to ensure that the system does not fall into disrepute again.

The final area in which we need reform is the grant itself. The formula is about right, as it recognises deprivation and the needs of councils to tackle the problems that come from that deprivation. It also recognises rurality and the extra costs of delivering services in sparsely populated areas, but it has not been fully implemented. We are still suffering from the disgraceful way in which the previous Conservative Government gerrymandered the grant to their own local authorities. In the years from 2008-09 to 2010-11, Wigan will have been underfunded by £8 million, £6.5 million and £5.5 million respectively-a total of £20 million over those three years.

There is no doubt that there has been year-on-year improvement, and it has ensured that we are getting closer to the target. We have moved from 6 per cent. below it in 2008 to 4 per cent. below now, but we have to quicken that pace if we are to tackle deprivation properly in areas such as mine. That is all the more important when councils are linked in with primary care trusts. One difficulty is that local authorities and PCTs are now delivering services on a common basis much more. They have common offices, pooled resources and joint funding. When a local authority is underfunded, such as Wigan and many others, the PCT that serves the same area is underfunded. In Wigan, the PCT was underfunded by £26 million in 2008-09, £25.5 million in 2009-10 and £25 million in 2010-11, so £76.5 million that should have gone to Wigan borough for its health services has not. If we want to tackle the health and social inequalities that exist in our country, we must urgently tackle health and local authority funding inequalities.

There is no doubt that that would cause problems for local authorities that are overfunded. I heard Susan Kramer complain about the funding for Richmond. We hear a lot from the Liberal Democrats about the fact that they believe in equality, yet here we can make an impact in that regard by reducing the amount of money that Richmond gets-it receives more than 200 per cent. more than it is entitled to. We could reduce that and put it into areas such as mine that are underfunded.

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