Local Government Financing

Part of Opposition Day — [2nd Allotted Day] – in the House of Commons at 5:40 pm on 29th June 2010.

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Photo of Clive Betts Clive Betts Chair, Housing, Communities and Local Government Committee 5:40 pm, 29th June 2010

Obviously it would be up to the Government to make any such announcement, but the idea that people should move from communities in the north, where there may be enough housing, to find jobs in the south, where there is a particularly chronic housing shortage, beggars belief. What would people on waiting lists in the south think of someone who arrived there and said, "I will have that house as a matter of priority, because I am moving down here to work"? The policy has not been thought through.

If any Member on the other side of the House can tell me where the mechanism and the funds will come from to enable new social rented housing to be built, I ask him or her to stand up and do so. So far, I have heard nothing from either the Conservatives or the Liberal Democrats. There are no funds for council house building-they have been stalled-and the funds for housing association building are limited. Given the reduction in cross-subsidy from the selling of homes, any money that the Homes and Communities Agency may have to fund housing association accommodation will produce fewer houses. Fewer social houses will be built as a result of this Government's policies, and I am aware of no commitment from Ministers to rectify the position.

What will the Government do about the overall funding situation? We have heard about 25% cuts, and also about protection for education. Presumably Departments other than those dealing with schools and defence will take a bigger hit. We are assuming that councils will receive at least 30%, but the arrangement is not fair, because we will have to protect adult social services and children's services. What is left? Libraries, parks, recreation, street cleaning, the environment and refuse collection. It is no use the Secretary of State's telling local authorities how to collect their refuse. Will they have the money to pay for one refuse collection a week?

Then we must consider the differing impacts on various councils. I opposed individual council tax caps when our Government introduced them, and refused to vote for them, but let us assume that they are imposed now. At least authorities will receive the same amount of money from council tax, but there will be cuts in their Government grant. Councils with the most deprivation in their areas receive a bigger amount of grant than those with the least deprivation, which receive more of their money from council tax. Council tax is to be frozen but Government grant is to be cut by 25%, which means that the councils that will suffer the biggest cuts in their overall budgets are those with the most deprivation. That is unfair, and we fundamentally oppose it. The Liberal Democrats used to oppose it as well, and it is time that one or two Members on the Government Benches, including the Minister, started to explain how they will make the system fair.

The fact is that the most disadvantaged councils and communities will be hit hardest by the 25% cuts in Government funding. In their areas, library, recreation and street cleaning budgets will be cut in half. If the Minister does not agree with that, he must explain why my figures are wrong. If such facilities as adults' and children's services are protected from the 30% cut in the grant, the impact on other services will be dramatic, especially in areas that receive a large amount of Government support because of deprivation.

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