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

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Sir Paul Beresford: This will be a lighter speech than the Minister anticipated. I was trying to be helpful earlier. It always intrigues me when a Minister uses the words, ''a light touch''. When one talks to local authorities, one comes to understand that the light touch seems to be like being hit by Mike Tyson. I deliberately asked the Minister for some idea of the hoops that local authorities have to go through to get such funding. I did not quite receive an answer, but it seemed that it might help the Minister to see the matter a little more from the viewpoint of the local authorities and that she might lighten the touch.

As I understand it, the neighbourhood renewal strategy has to be drawn up by local authorities to cover their expenditure. All the plans have to be agreed by a local strategic partnership. Setting up a partnership—surprise, surprise!—takes pages and pages of guidance. We are getting used to that; everything in local government now involves guidance from central Government, which is handcuffing them to the wall. Even the LSPs have pages of guidance.

I asked how much the LSPs and empowering of the community would cost, and I could not believe the figure that I was given. I was told that in addition to the £800 million of the neighbourhood renewal fund, the empowering of the community was supposed to be £300 million. I cannot believe that that is right. I would be grateful if the Minister would consider it and write to me on the subject. If it is £300 million or somewhere near that figure, will she explain what it will achieve? I do not anticipate an answer today; that would be grossly unfair.

I understand that each LSP has to be accredited to receive NRF money. Again, barrow-loads of criteria are involved. In addition, to assist them, the Government officers—often two of them—attend all meetings. That raises a suspicion as to how many officials there are in the Department attending meetings and monitoring activities. When the Minister writes to me, will she give a simple figure, comparing the combined numbers of personnel in the Departments of Transport and the Environment, as they were when the Government came to power, with the total number of officials now. The result will be intriguing.

There is deep concern among local authorities about the accreditation. They say that the procedures through which they have to go are a nonsense. Membership has to be representative of ethnic minorities and there must be across-the-board representation of the types of people working in the area and local bodies. The individuals have to receive training and they have to go on away days to facilitate teamwork and bonding. Many of those whom the Government would like to belong to LSPs—and who

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are joining them to begin with because they are worthy people—are leaders of local councils, police commanders, chairmen of this, that and the other and other senior people. They are busy people who do not really need training and away days to facilitate teamwork and bonding.

The LSPs then have to meet to produce their accreditation plan. Many of them have hardly met—as the Minister said, one of them has not met at all—and most of the ones in London, having met once or twice, have suddenly been required to produce their plans. The Minister is shaking her head. My source was last minute, but I was staggered. When she writes to me, will she confirm whether I am correct?

Some local authorities are very upset. I mentioned Camden because it is felt there that this is yet more Government interference— it does look like it. If the money has all been put into community development, particularly if it is as large an amount as £300 million, I should be interested to know on what evidence the conclusion that this is the way forward is based. I cannot recall any.

My underlying worry is that local government nowadays is local but not government. Elected councillors are not acting as local government; they are being totally undermined. Their strategy has, effectively, to be ratified by unelected LSPs. Even more worryingly, there does not appear to be a statutory basis for the scheme. If there is one, it is weak. However, the system functions, effectively, by intimidation—a council must either come up with results, do what the LSP wants and follow its plans or get no money. Everyone wants money to be strategically placed and used to overcome deprivation throughout the country, even in my green areas. We want it to be used effectively and we want local government to be both local and government.

5.33 pm

Mrs. Annette L. Brooke (Mid-Dorset and North Poole): I have to declare that I am a councillor in an authority, but that council will not feature here, if members consider the order of deprivation, because it is Poole. As a longstanding councillor, I find it hard to listen to Conservative Members lamenting the area cost adjustment and standard spending assessments. I have lived through many years and have even made representations to the hon. Member for Mole Valley. Although there have been lots of good things for local government in the past five years, one severe burden has been the introduction of the many schemes requiring an enormous amount of bureaucracy and resources to put in bids, many of which do not succeed, which is very disheartening. I welcome the fact that the scheme involves less bureaucracy, as that is a step in the right direction. I would welcome any moves to combine some of the schemes, because the burden is huge.

To pick up on the points made by a Conservative Member about paragraph 2 of annex B, it appears that some of the money will support basic services. I am

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especially interested in extra money that supports what might be called cross-cutting issues. Many of our social issues, particularly those that involve deprivation, require a multi-disciplinary approach. I hope that money from this pot will go towards bringing those services together. Often, local authorities have money in the education pot and the social services pot but find it difficult to combine those funds and use them well. I hope that the fund might facilitate that approach, which we need in this day and age.

I agree with the comments on Doncaster and Lambeth. On the face of it, the situation looked odd, until the Minister explained. Those two areas are close together on the deprivation lists for local authorities and the figures did not seem to make sense in population terms. I hope that I might be included in the mailing. I apologise if what I have to say makes me sound arrogant, as a new Member who demands something different from the usual, but it would have been a good idea to include in the report a simple example that shows how the formula works. I hope that such an example might be included in a letter and that the Government will move to an open and transparent formula for all local government funding. If the formula is simple, it should be easy to follow. I am sure that it cannot be as complicated as the formula we were shown for the public-private partnership for the London tube. To be able to see formulae that we can understand will give everyone confidence.

On the point about pockets of deprivation, that situation is relevant in my area and I will identify the concept of relative deprivation in a wider context. When resources are scarce, we must target absolute deprivation. I accept that but, in an area such as mine, it is difficult for the head teacher whose school is not as affluent as those of other head teachers, for example, as he does not have anyone to turn to and share experiences with. One head teacher with whom I spoke said that it was much easier when he worked in London because there were so many other head teachers with whom he could share his problems, but that it was hard for him to be the only headmaster of a poor school in the middle of an affluent area. I hope that the issue of relative deprivation will be dealt with when we have made progress with the other important issues.

I agree with the comments on top slicing. I found it hard, listening to the generous settlement made this year and knowing that council tax increases in my area are well above 10 per cent. When there is a percentage increase on the local finance settlement, it should cover all the initiatives, some of which are targeted to specific areas, so that an area such as mine does not have the same percentage increase. If senior citizens are on a fixed income, it is at the same level wherever they live in the country. That is an important point, but there is much to welcome in the scheme.

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5.38 pm

Ms Keeble: I shall deal with some of the points that have arisen. I welcome the support of the Liberal Democrats on the funding allocation, which is central to tackling the problems of disadvantage that exist in our country.

The hon. Member for North-East Cambridgeshire referred to fragmentation of initiatives. We recognise that problem and have put the scheme in place with that in mind. He talked, too, about the plethora of measures taken by the Government to deal with disadvantage, and referred to the Rowntree Trust. He dealt with figures from 1999, which clearly did not take into account several of the schemes that have been set up since then. He also failed to identify the schemes.

It is right that we have introduced a host of measures to deal with disadvantage, such as the working families tax credit and a record increase in child benefit. We have made massive inroads into fuel poverty for pensioners, such as the winter fuel allowance that the Conservative party opposed. We have set up the child care tax credit and the new deal for single parents, which has made it possible for the first time for single parents to go back to work and have their children looked after properly.

A raft of measures has been put in place to deal with disadvantage on an individual level. The scheme that we are discussing will deal with disadvantaged communities and ensure that they are given the extra support and that people in those communities receive the same level of public services that people in more advantaged parts of the country receive and can expect to have the same chances in life.

We recognise that the best way in which to deal with disadvantage is to use mainstream services and ensure that they target the most disadvantaged areas. That is implicit in the neighbourhood renewal strategy of which the funds are a key part and why, instead of putting another bolt on the scheme, we have put an extra £43 billion into public services. We are saying to them that they must tackle the areas of disadvantage in the local communities and turn around the life chances for the people in such areas. Some may say that that is stating the obvious, but the sad fact is that such action has not been taken so far, partly because of the under-investment in public services during the 18 years when the Conservative party were in power.

In the first two years of the Labour Government, we continued with the Conservative Government's spending patterns and that created some difficulties in some areas. But now we have the extra money that also came out of the spending review 2000, we can tell the public services that they must deal with the disadvantage problems in their areas. In the long term, that strategy will tackle the problems and deal also with some of the points raised by the hon. Member for Mid-Dorset and North Poole.

We are debating a long-term strategy. Long-term structural problems need long-term solutions. We are not talking about quick fixes, gimmicky city challenges and so on, but long-term sustained investment in the public services to tackle disadvantaged areas and make sure that their inhabitants receive the same life chances

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as others. We have set targets. The hon. Member for North-East Cambridgeshire asked what was meant by x. A further aspect of the scheme is that it pulls together all the different service departments. The definition of x is down to the individual service department. We are concerned simply with the NRF funding.

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