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Local Government Finance Settlement — Motion to Take Note

Part of the debate – in the House of Lords at 3:42 pm on 9th January 2014.

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Photo of Lord Snape Lord Snape Labour 3:42 pm, 9th January 2014

My Lords, along with other noble Lords who have spoken in the debate, I express my appreciation to my noble friend Lord Smith of Leigh for giving us the opportunity once again to discuss the latest local government settlement. Noble Lords will forgive me if I take a slightly different road from earlier speakers in order to avoid repetition of what has already been said.

I draw your Lordships’ attention to a report in this morning’s Daily Telegraph under the headline, “Councils’ ‘impossible dilemma’ over tax help”, which goes on to say:

“Local authorities in England will be forced to cut services or increase tax bills over the next two years because of a predicted £1 billion reduction in government funding for council tax support a report has warned”.

The report to which that refers, of course, was produced by the Local Government Association, which, despite the optimism of one of its vice-presidents in the form of the noble Lord, Lord Tope, was fairly scathing about the settlement that your Lordships are discussing today. I watched the noble Lord with interest as he fought during his speech between loyalty and reality. I am afraid that although, in his speech, loyalty proved to be more effective, reality shines through in the LGA report. Whether or not the LGA takes its vice-president to task for what he had to say is a matter for him and it. The LGA warns that the figure for the reduction in overall support for local authorities by 2016 could rise to up to £1 billion, creating that “impossible dilemma”, to which the Telegraph report refers,

“between charging council tax to the working age poor or extending cuts to services such as road repairs, bin collections and care for the elderly”.

The report goes on:

“But the local government minister, Brandon Lewis, said ‘the reforms give councils stronger incentives to support local firms, cut fraud, promote local enterprise and get people into work’”.

I do not know the Local Government Minister—he was born the year I was elected to a local authority, in 1971—so I looked him up on Wikipedia. To my surprise I saw that, during his time as leader of Brentwood Borough Council, he co-hosted a radio show with local MP Eric Pickles, called “The Eric and Brandon Show”. I do not know whether perhaps they were the Laurel and Hardy of Brentwood, although that is hard to imagine. The Secretary of State of course relishes his appearance and caricature as the jolly fat man who “waters the workers’ beer”, to quote an old song, although jollity is not something I would normally associate with him. The fact that the two of them had a radio show indicates that at least there is some diversity as far as newly appointed Conservative Ministers go. However, the suggestion that this settlement goes in any way to support local firms was truly undermined by the noble Lord, Lord True, who pointed out that central government refuses to relinquish any control over the sort of planning matters that are so important at local level. That surely demolishes that particular argument. It was also said that the settlement will get people into work but, of course, as my noble friend Lady Donaghy has just said, hundreds of thousands of people have lost their jobs in local government since the coalition was appointed. A succession of such settlements will guarantee that the number of people in local government out of work will continue to rise.

I ask your Lordships to look with me at what the settlement means for my own local authority. I had the honour to represent the constituency of West Bromwich East for some 27 years. It lies in the borough of

Sandwell. The borough issued a press statement following this so-called generous settlement we are discussing today. It said:

“The revenue grant cut of what is now being [termed] ‘Standard funding assessment’ for 2014/15 … is £22.2 million and the provisional cut for 2015/16”— which most of us would agree is the crunch year—

“is a further £28.9 million. These cuts will add to the cuts to date of £55 million to provide an overall cut per year in government revenue grant of £107.1 million since May 2010”.

I defy any of us to say that local authorities, and particularly one such as Sandwell, could manage cuts like that without a substantial reduction in services.

Sandwell Council has never been one of those eccentric local authorities that made all the headlines in the 1970s and 1980s. It has never gone in for festooning lamp-posts with anti-nuclear signs or other such fripperies. Under the leadership of the current leader of the council, Councillor Darren Cooper, it has continued the eminently sensible policies for which it is renowned. Yet it is being punished—I can find no other word to describe it—by the sort of settlement we are discussing today. The fact is that the council will now have to cut deeply into those resources that my noble friend Lady Donaghy referred to. The people who will suffer because of this settlement are the elderly, children in care and various other socially deprived people in areas of great social deprivation—such as the borough of Sandwell.

Of course, it is not just in Sandwell that local authorities are quite rightly saying enough is enough so far as this Government’s attitude to them is concerned. Reference has already been made by my noble friends to the meeting that took place last night in Wolverhampton, where the straight choice was between massive reductions in services or insolvency. That is the situation in which they find themselves. If next year’s settlement is along the lines that we are discussing in this debate, other local authorities—not just in the West Midlands—will find themselves in a similar position.

The city of Birmingham does now. Again, it is a city that has done its best to sell itself throughout Europe and the rest of the world, and done so enormously successfully. The transformation in Birmingham over the past decade or decade and a half has been enormous. However, the leader of the city council, Sir Albert Bore—another respected figure, I hope by both sides of the House—said:

Birmingham City Council is a responsible local authority and we will do all we can to deliver against these figures”— that is, the figures we are discussing in this settlement. He went on to say:

“However, to pretend that they can be delivered by traditional efficiencies and the sort of savings the Secretary of State for Communities and Local Government has highlighted is simply misleading. This council”— that is, Birmingham City Council—

“has not sought to delude itself or its citizens that these massive budget reductions can be achieved in this way. Accordingly, we are systematically and fundamentally reviewing all of our services, working with our partners and undertaking an extensive dialogue across the city. We will protect key services wherever possible but it may be necessary to cease the provision of others altogether”.

That is the scale of the dilemma.

I conclude on what is perhaps something of a surprising note: the impact that this Government’s attitude to local governance has on Conservative representation around the West Midlands. In my own borough of Sandwell, there are 72 councillors. It has been predominantly Labour since it was created in the Heath—at the time, I called it the Heath-Robinson—reorganisation of local government back in 1974. But the Conservative Party controlled the council for a year or so in the 1970s. Out of 72 councillors on Sandwell Council, there are now only two Conservatives left. I hope the Minister will take this in the spirit that it is intended, as although I have no great wish to promote the interests of Conservative councillors—I have worked with some extremely good ones over the years; I have worked with one or two I would not describe in quite the same way—they are a dying breed outside London and the south. Again, when I was a councillor, Manchester City Council was controlled by the Conservative Party. There are now no Conservative councillors on the city council at all. In all seriousness, the sort of parsimony we are discussing in the settlements that have taken place over the past few years under the coalition—particularly this one and perhaps the one next year—will further decimate the Conservative Party’s local government base. I support this particular aspect of this: it certainly will not help the coalition get re-elected in 2015.