Local Authority Funding

Oral Answers to Questions — Communities and Local Government – in the House of Commons at 10:30 am on 10th June 2010.

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Photo of Dominic Raab Dominic Raab Conservative, Esher and Walton 10:30 am, 10th June 2010

If he will review the extent to which the local authority funding formula accurately measures the funding requirements of local communities.

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Photo of Bob Neill Bob Neill The Parliamentary Under-Secretary of State for Communities and Local Government

As my hon. Friend is aware, this is the last year of a three-year settlement. We will consult on our proposals for 2011-12 in due course. We are of course prepared to keep an open mind about options for change in the distribution of formula grant to local authorities.

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Photo of Dominic Raab Dominic Raab Conservative, Esher and Walton

I thank the Minister for his response. One ward in Elmbridge has double the national average of child poverty, yet we get back just one third of the national average of funding for local services. Will he consider the local funding formula as part of the local government finance review to ensure that it is based on a truly objective assessment of local needs?

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Photo of Bob Neill Bob Neill The Parliamentary Under-Secretary of State for Communities and Local Government

I am grateful to my hon. Friend for the question. I know that, very swiftly after his election to this House, he was in contact on behalf of his constituents regarding a number of related issues. I assure him that, yes, the Government are committed to a review of the local government finance formula and that, within its scope, we will of course consider the points that he and others have made.

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Photo of John Denham John Denham Shadow Secretary of State for Communities and Local Government

The Conservative party was elected on a promise to slash public services this year-the Liberal Democrats must answer for themselves-and huge cuts affecting local government have been announced today. May I ask the Minister why what he has proposed today is so unfair? Why is it that the impoverished northern mill towns, the ex-coalfields and the struggling seaside towns will take the largest share of the cuts? Why is it that the big cities-Manchester, Liverpool, Leeds and Birmingham-will take the largest cuts? Why is impoverished Newham to have a cut of £4.6 million and wealthy Richmond one of just £900,000?

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Photo of Bob Neill Bob Neill The Parliamentary Under-Secretary of State for Communities and Local Government

I have no intention of taking lectures from a member of a Cabinet that left this country record levels of debt. Unless there are cuts, by 2014 we will be paying more in interest on the debt than we will in council tax, business rates, inheritance tax and stamp duty combined.

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Photo of Clive Betts Clive Betts Chair, Housing, Communities and Local Government Committee, Chair, Housing, Communities and Local Government Committee

Regarding today's written statement, does the Minister not accept that local authorities have been at the forefront of making efficiency savings-2% year on year-so to ask for a further 1% part way through the year, on top of the 2% to which they are already committed, will effectively mean cuts in local authority spending part way through the year of about 4% to 5%? Rather than being about efficiency savings, this is surely the first round of the savage cuts for local authorities that Ministers promised us.

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Photo of Bob Neill Bob Neill The Parliamentary Under-Secretary of State for Communities and Local Government

The hon. Gentleman, who is experienced in these matters, well knows the dire financial straits the country is in and the need for all sectors to save money. However, he ought to put that in the context of what we have had to do because of the legacy of his party's Government. We have taken steps to protect formula grant, to un-ring-fence a good deal of grant to give local authorities more financial flexibility and to remove burdens such as the expensive comprehensive area assessment inspection regime.

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Photo of David Blunkett David Blunkett Labour, Sheffield, Brightside and Hillsborough

If the Government cut external funding based specifically on local authorities' levels of deprivation-external funding available to Witney in Oxfordshire at 1.7% but to the city of Sheffield at 18.5%, for example-is it not inevitable that those in greatest need will take the biggest cuts?

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Photo of Bob Neill Bob Neill The Parliamentary Under-Secretary of State for Communities and Local Government

Those in greatest need ultimately bear the burden of paying off the debt which this country has been left- [ Interruption. ]

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Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission

Order. I know that these are high-octane exchanges, but the House must calm down, because people lower down the Order Paper deserve a chance to get in.

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Photo of Bob Neill Bob Neill The Parliamentary Under-Secretary of State for Communities and Local Government

I hope that the right hon. Gentleman recognises that, if we are to have sustainable, quality local government services, the first thing we have to do is get this country's economic mess sorted out.

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