Local Government (Finance) Special Grant Report (No. 93) (HC 654) on the Neighbourhood Renewal Fund 2002-03

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Sir Paul Beresford: I understood that officials from the Minister's Department attended meetings of the LSPs and were members of them. Will she elucidate and explain from where the membership of the LSPs is drawn?

Ms Keeble: I am a bit bemused by the question about officials from the Department being on LSPs. There are obviously LSPs in the 88 target areas, 87 of them already accredited. However, there are also LSPs in other areas—I should think that there is one in the hon. Gentleman's constituency. I have already mentioned some of those who are represented on LSPs, such as local health authorities, the police, local business people and the voluntary sector. In some cases there will have to be complex structures to ensure that all interest groups are properly represented. Officials from Government offices might have attended some meetings—they are well aware of LSPs, but I do not think that they are members of them.

Sir Paul Beresford: I understand from one local authority in London that all LSP meetings are attended by at least two officials from the Government office for London. That so upset Labour Camden that it tried to ban the Government office for London officials from attending. Camden saw it as Government interference in a ridiculously small area—I have some sympathy with that.

Ms Keeble: Officials from Government offices might go as observers; such meetings are not secret. The relationships between Government offices and LSPs clearly differ between areas. I was not aware of the degree of conflict that the hon. Gentleman has suggested that there is in Camden. I have been round some of the Government offices and spoken to them about the LSPs and have discussed with local authorities the relationships between LSPs, local authorities and Government offices. In most cases, the working relationships have been good and there has been a fair amount of collaboration. There has been a lot for local authorities and others to learn in the process and I dare say that views have been different in some parts of the country. If the hon. Gentleman wants details as to what has happened in Camden, I shall happily write to him.

We are keen that the NRF should not be encumbered by excessive bureaucracy but, rather, monitored at a level consistent with proper accountability and

enabling Government and local people to assess its impact. In keeping with that light touch approach, condition 3 in annex C to the report requires local authorities to produce a single statement of use, agreed with the LSP, setting out how grant has been used in 2001-02, together with actual and planned expenditure in 2002-03. We will issue further guidance about the form and content of the statements soon.

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Mr. Moss: On another technical point, the Minister said that the original restriction on spending some of the money on administration had been waived. She did not tell the Committee whether a ceiling had been imposed as a percentage of the grant that could be spent on administration.

Ms Keeble: No. I can tell the hon. Gentleman that about £1.7 million was spent. That is about 0.8 per cent. of the total budget, which, given the amount of work that local authorities and others had to do in getting the LSPs up and running, is a very low percentage. The NRF is an important strand in the neighbourhood renewal strategy. We see it as a way to ensure that we end the disadvantage that there has been and to close the gaps between disadvantaged areas and the more affluent parts of the country. I commend the report to the Committee.

5 pm

Mr. Moss: Thank you, Mr. Benton, and may I say what a pleasure it is to serve under your chairmanship yet again.

Conservative Members welcome any Government support for local councils in tackling deprivation, but we are concerned about the Government's fragmented and poorly administered urban regeneration programmes. Let us consider the Government's record, which stands condemned by their own research statistics. A publication from the Department for Work and Pensions entitled ''Households below average income 1994/95-1999/2000'' shows that, under Labour, overall income inequality rose since 1997, the percentage of the population below low-income thresholds which vary with mean income

    ''have remained broadly constant in recent years'',

and the percentages of the population below low-income thresholds that vary with median income ''have shown little change''. The percentage of working-age adults below low-income thresholds that vary with mean and median income

    ''showed little or no change''

and, for the proportion of pensioners below thresholds of contemporary median income,

    ''the general pattern is one of no consistent trend.''

As the Joseph Rowntree Foundation commented in its publication ''Monitoring Poverty and Social Exclusion 1999'',

    ''since its election, the Government has introduced over a hundred policies designed, at least in part, to tackle problems related to poverty and social exclusion. But as our report shows, the problems continue unabated.''

Chris Ruane (Vale of Clwyd): The hon. Gentleman quotes the Joseph Rowntree Foundation statistics. I believe that the foundation used 50 indicators of poverty, so the hon. Gentleman is being very selective in his quotes. I have read the latest statistics from the Joseph Rowntree Foundation and the situation is improving on about 40 of those indicators.

Mr. Moss: I am selecting from a report that says that the problems continue unabated. That is fairly damning, irrespective of whether some of the indices are improving.

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Chris Ruane: Are they the latest statistics for 2001 or are they the statistics for 1999?

Mr. Moss: They are from the 1999 report, as I said when I gave the reference for the quotation. The hon. Gentleman must be patient because there are further damning statistics.

The problem is that the Government's regeneration programme is fragmented. The Labour Government have created regional bureaucracy and a series of quangos and task forces. Frankly, the regeneration programme has been shambolic. The single regeneration budget has been fragmented into a plethora of disjointed objectives with little rhyme or reason.

The former Department of the Environment, Transport and the Regions Select Committee report, ''Proposed Urban White Paper'' dated July 2000—so we are getting closer to the present day—said:

    ''There is a lack of coordination between local, regional and national government...DTI and DETR do not appear to have the same views about the role of cities in the regional economy...The DTI does not sufficiently recognise the need to make the economic competitiveness of urban areas a priority.''

In its report ''Reaching Out'' of February 2000, the Cabinet Office admitted,

    ''the clear evidence from those on the ground...is that there are too many Government initiatives, causing confusion; not enough coordination; and too much time spent on negotiating the system, rather than delivering...the variety of public funding regimes, particularly in the regeneration activity, is not helpful...the tiers of central Government that impact on the regional level are highly fragmented.''

The right hon. Member for Hartlepool (Mr. Mandelson) attacked the regeneration plans introduced by the former Secretary of State for the Environment, Transport and the Regions, the right hon. Member for Hull, East (Mr. Prescott), stating in The Independent in December 2000:

    ''there is presently a risk of having too many departmental programmes. We need a simple, effective means through which local communities can channel the money and support already available into areas where needs are not being met.''

It is not me who makes such statements, but Government Members. It is complete nonsense to come to the Committee and declare that everything in the garden is rosy.

Mr. Julian Brazier (Canterbury): As well as Government Members, such statements are made by many representatives of voluntary organisations that receive grants. Someone who does an excellent job on one of my toughest council estates made exactly that point last month, saying that as much time was spent on tracing small grants to keep the charity going as was spent on running it.

Mr. Moss: My hon. Friend makes a valid point.

The figure is £300 million of additional money in the current year, rising to £400 million in the next year, I think. In response to the question asked by my hon. Friend the Member for Mole Valley, the Minister would not admit that that must be top-slicing of money from the total package of Government grants. It must be part of the specific grants that are taken

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from the top and held on side to be targeted in one of various ways. The subject that we are discussing is one target. The figures are up to 15 per cent.

In the White Paper published before Christmas, the Government admitted that they might have gone too far in the nature of the specific grants, as it erodes the base level of provision expected of every council. Let us consider the rises in council tax, and the front page of today's Daily Express—[Laughter.] Hon. Members may scoff or talk about liars—I would not do so—but the rises mentioned are of the order of 14 per cent. Does any hon. Member believe that the rise in council tax in their area will be less than 10 per cent. in the coming year? Of course not. It has gone up by more than three times the rate of inflation in each year of the Labour Government. Our local councils are given more and more responsibilities, but less and less money to meet them.

Despite all the extra money that seems to be swishing around and which the Government are always proud to proclaim, they underspend. They do not even spend the money that they announce that they will spend on the various categories. In the last Parliament, the Government did not spend all the money that they had allocated for regeneration. Research by the House of Commons Library in 2000 suggested that half the funds allocated to the new deal for communities had not been spent since its launch in 1998. In May 2001, the Institute for Fiscal Studies noted in a briefing note on spending on public services:

    ''the Department for the Environment, Transport and the Regions failed to spend up to their entitlements in 1999-2000. The latest aggregate figures for net investment spending in 2000-01 shows that considerable underspending occurred in that year too''.

Let us come to the specifics of the report. I would like to return to the issue raised by my hon. Friend the Member for Mole Valley about how the money had been allocated between the various local authorities. At no stage did we imply, nor do we now, that there has been any gerrymandering of boundaries or wards simply to allocate money to areas towards which the Labour party may be favourably disposed. We have never made that accusation.

I would not expect the Minister to answer the specific question that I posed today, but I would be obliged if she would write to me. I want her to explain in detail how a relatively small town with no great population such as Doncaster—perhaps Doncaster calls itself a city, I do not know—is given far more money than the whole borough of Lambeth, and is given much the same sum as Leeds and Leicester. I need an explanation of how the Department arrives at those figures. I am not questioning the methodology, but the figures seem to be an anomaly.

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