Local Government Financing

Part of Opposition Day — [2nd Allotted Day] – in the House of Commons at 3:43 pm on 29th June 2010.

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Photo of John Denham John Denham Shadow Secretary of State for Communities and Local Government 3:43 pm, 29th June 2010

I should make some progress, because I have further important points to make to the House-unfortunately, the Secretary of State is not here to defend them. When he made his announcement, he tried to sweeten the pill by promising local councils greater freedom in spending what was left of their money; he said that £1.7 billion would be taken outside the local government ring fence. That was fair enough, because that is the same direction of travel that the Labour Government had set and I am not going to argue with it, but what has happened since? This Government have now been forced to admit that it was all a mistake and that the figure was not £1.7 billion after all, but £1.2 billion, so we have another disappearing half a billion pounds. How could that be? The truth is that the Secretary of State and his Ministers are not on top of their brief, and they do not understand how local government finance works or where the money goes.

All that would be bad enough, but that is not all. What is being revealed bit by bit is this Government's limited vision of local democratic government. The country faces a major challenge as we and the world recover from a global recession, and effective, democratically accountable local government must be part of the solution, not part of the problem, but it is now clear that this right-wing coalition does not understand how important local government must be.

It is not just about the unfair cuts, the impact on front-line services and the impact on growth. It is quite clear that there is no decision so small that it is too small for the Secretary of State to intervene. We wanted local councils to be able to decide whether planning powers should be used to control the spread of houses in multiple occupation and to let them decide what was best for local people, but now the Secretary of State is tearing up those rules. Who is going to decide what is best for local people? He is. We wanted local councils to have a say in the big planning decisions that affected more than one district. Who will decide now? The Secretary of State. He wants to set the council tax in every council, how often the bins are collected and how often councils can communicate with the public. He imposes cuts from the centre and will not talk to local councils about how to do it-no wonder he will not turn up to speak in the House. Remember the power of general competence? Remember the Prime Minister, when he was Leader of the Opposition, saying that councils would be free to do whatever they like as long as it was legal? That did not last long under this Secretary of State. He needs to learn that there is a lot more to localism than sitting behind a desk in Whitehall giving orders to local councils.

Councils need to be leaders, shaping and delivering services in their area. Under Labour, councils were better financed-we reduced ring-fencing and targets and believed that local councils were often best placed to decide what was best for local people. Labour local councils had the lowest council taxes and Tory councils had the biggest increases. We trusted councils to deliver the things that local people wanted. That is why local councils were the right vehicle to deliver the 18 million free swimming sessions for pensioners and kids that will now be scrapped. The views of the Tory leader of Derby council will be shared by many. As he said:

"The withdrawal of funding for the free swimming scheme is very disappointing because we consider this to be a resounding success in Derby."

It was our belief in local government that made us see why local councils should be the lead on council and social housing and in supporting the Kickstart schemes, all of which are now on hold or scrapped. That is why local councils were the right people to lead in tackling worklessness and why so many local councils, including Tory councils such as Kent and Hampshire, were big bidders for and big users of the future jobs fund. They could see that it was right to offer real jobs to young people in their communities. Now, up to 80,000 jobs for young people will be lost.

We trusted local councils-Tory, Lib Dem and Labour. Yes, sometimes they let us down. I remember when the Tory-Lib Dem coalition in Birmingham failed to spend its working neighbourhoods fund money; perhaps we should have realised that that was the shape of things to come. However, many other councils repaid that trust many times over.

It was right that local councils led on Building Schools for the Future. There are now 750 schools in 90 local authorities whose schemes are on hold and in doubt.

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