Local Government Finance

Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 6:34 pm on 3rd February 2010.

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Photo of John Howell John Howell Conservative, Henley 6:34 pm, 3rd February 2010

I spoke in a similar debate a year ago when we discussed the previous financial settlement. I struggle to see where the massive improvement that the Secretary of State talked about in his opening remarks has come from. Instead, there is greater uncertainty, and the attitude of central Government to local government during this year can be described only in terms of a master-servant relationship. One specific piece of legislation illustrated that fact for me and many other hon. Members when it was in Committee and as it progressed through the House earlier in the year, but I shall come to that later.

Is the settlement really an attempt, as the Secretary of State made out, to talk up a Labour view of localism? I cannot recognise it as localist, and I do not think that any councillors could either. Overriding everything is the feeling of utter powerlessness of councillors, and that was one of the major reasons many stepped down at the last elections. Many still have that feeling of powerlessness, and nowhere is that more apparent than when it comes to money and their ability to set their own budgets.

The Secretary of State referred to the importance of this time of the year, not just in relation to this debate, but because of the budget setting that many councils are going through and how the information before us feeds into it. My former colleagues on my own county council remain as frustrated and disappointed as I used to be every budget time because of the little influence they have in setting the budget and allocating money to their own priorities in the area covering a range of different subjects. That is partly a question of ring-fencing, and again the Secretary of State made great play of having improved the business of ring-fencing.

In preparation for this debate, I asked my local council to give me an idea of the ring-fenced and non-ring-fenced balance amounts. I have an e-mail from the finance and procurement team stating the latest grant figures for 2010-11: a total of £526.2 million, of which £484.8 million is ring-fenced and only £43.2 million is non-ring-fenced. When it comes to councillors being able to use the money and make changes according to their own lists of priorities, even major councils with overall budgets of about £1 billion have just a few tens of millions of pounds at the most. That is not the reason councillors-there are many former councillors in the Chamber-stood for election.

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