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Mr. Lindsay Hoyle (Chorley) (Lab): This is a very important debate, as we are talking about local government and its financing and future. I thank my right hon. Friend the Minister for Local and Regional Government for the 5.7 per cent. increase that he gave to Chorley, and I recognise that it is significant by comparison with what we have had for many years.
The history of Chorley is simple, however. Prudence was not born in the Treasury across the road; it was born in Chorley. Chorley has always been a low-spending authority, and it has prided itself on low spending, but that has always been its difficulty. Unfortunately, Chorley was not historically a large-spending authority. It saved money and, because it had good balances, it encountered problems with the Conservative Government. It was penalised for prudence in the past, and as it was a low-spending authority, it always had a low base to begin with. Tragically, whichever Government were in power, it never seemed to get its fair dues, and it was heavily penalised historically under previous Governments.
It is that problem that comes through today. A 5.7 per cent. increase is a huge amount of money, but on a small base it means only £370,000-odd in reality. The difficulty that I face, along with the local authority and council tax payers, is that the way in which the floors have been set means that £1,324,000 is trapped. That is the case because of three years in which the ceilings have been removed, but in which the floors have been set at a certain level and the money has never been allowed to come through.
Looking to the Minister, I need some good news for those council tax payers. I do not believe that they should have been penalised because the money has been withheld. People might not like the terminology, but that is the reality, and I am not on my own. There are six other districts in Lancashire, and a total £9 million is being withheld from those local authorities, along with the ability to set a fairer budget for council tax payers in Lancashire. Throughout the country, the total for the districts from which money has been withheld is only £29 million, which is an absolute pittance. The Department probably spends more on window cleaning over three years than the amount involved in giving the money to those districts.
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Even if the Minister cannot tell me now that we will get the money, I look to him to tell me that he will look at the formula that will release that money to ease the pressure on council tax payers in Chorley and the other districts in Lancashire and allow them to have the fair share that they would have had if the floor had been moved slightly. I am not asking for other local authorities to be penalised, although that argument might be used. I do not want to pick on other authorities, and the amount involved is a small one in the budget of the Department. Surely, there is a way of rectifying the situation not only for Chorley and Lancashire, but for the whole country. A total of £29 million is involved. Let us resolve the matter and ease the pain for the future of Chorley. It is only right to do that.
I therefore not only congratulate the Minister, but ask him to please look at the problem, not least for Chorley and the other Lancashire districts. The amount is £9 million for Lancashire and £29 million for the country. I know that that situation can be resolved. What we want is a green light from him in his winding-up speech and an assurance that he is willing to look at the problem when the Government reconsider the formula. That is the only fair thing to do by those council tax payers in Chorley, who should not be penalised for something that is not their fault, but is a historical problem that has arisen because of the Conservative party.
It was the previous Conservative Government who put in place that trap for us. They were unjustified in sweetening their own authorities around London. Whether it was Westminster, Wandsworth or wherever, the Conservative authorities were the flagship authorities that always got all the trimmings and extra presents going to local government. We were the ones who had nothing on the table when it came to Christmas, because unfortunately we were penalised. Let us put those wrongs right; we have the chance to do so, although it has been a long time coming. I hope that my friends the Ministers will take that point on board. Many hon. Members wish to speak, so I shall take no more time, except to say to my friends, "Please look after the good council tax payers of Chorley."
6.59 pm
Sir Teddy Taylor (Rochford and Southend, East) (Con): The whole House will wish to congratulate the hon. Member for Chorley (Mr. Hoyle) on being so kind to other Back Benchers who wish to speak, by making his effective point briefly. In view of the number of hon. Members who wish to speak, I hope that we will all try to do the same.
I wish to put a basic point to the Minister about which I hope he will think carefully: although everyone accepts that the local government settlement for 2005–06 is relatively generous, it is desperately unfair to Southend-on-Sea and other seaside towns in the south-east. Procedures have been applied irrationally and unfairly, and despite Southend's massive social problems it has been obliged to cut vital public services in the fields of leisure, recreation and social services.
The document detailing all-purpose authorities lists just under 50 authorities with a summary of their percentage increase in grant. As the Minister said,
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Wokingham gets a 13.2 per cent. increase. West Berkshire gets 11.3 per cent., as does Milton Keynes, and Peterborough gets 10.1 per cent. The obvious question is: what problems do those authorities face that Southend does not experience?
Southend is a seaside town with a multitude of social problems and many houses in multiple occupation, so we have more problems than most. For example, I heard this morning that we now have 310 children in the care of the local authority. Which of the authorities that I cited experience such a problem, in addition to the problems with asylum seekers that we face? So what is the percentage for Southend? It is 4 per cent., and as I said before, I challenge the Minister to find any other all-purpose authority throughout the length and breadth of England with a lower figure. The figure is the basic amount—as low as it can go—but the basic percentage is only part of a wider story.
We have been pursuing the question of the population level for years. Formulae have been based on the 1991 census, and Ministers have been reluctant to use the updated 2001 census figures because of the substantial changes that they could make to funding. In a letter to me dated 1 September 2004, the Minister for Local and Regional Government stated that he did not intend to use the 2001 census figure for the 2005–06 settlement. His reason was that that would provide stability and prevent big changes in funding. However, he has incorporated the basic census figures, but not the extent of the social problems detailed within that total.
The effect on Southend has been catastrophic. The 2001 census tells us that our population has gone down from 176,000 to 160,000, but the council and I think that those figures are wholly wrong. For a start, the 2001 census excluded many addresses, and even if we ignore that basic point, our general practitioner patients figures show that there are 178,000 patients in Southend, although the Government clearly ignore 18,000 of them. When we pursued those issues with census officials, they advised us that the numbers were all part of the margin of error.
Even if we accepted such a remarkable fall in population, which is certainly not accurate when one bears the number of asylum seekers and houses in multiple occupation in mind, the council is really infuriated that the details of the new assessed population are not taken into account in the funding formula. Even if we assume that the 2001 figures are totally correct, which we do not, they show that there has been a big increase in our elderly population, which in itself should justify an additional £1.5 million in the funding formula. How can it be fair for the Minister to bring in the basic figures, which have led to us facing a massive reduction, but not incorporate other changes, such as the increase in the elderly population that should have given us an extra £1.5 million? It seems unfair and irrational to use the 2001 figures but not include the details.
Then we have the consequences of the unfair settlement. If a council was given a bad settlement, the logical thing would be to look for savings across the board. If the Minister looks at the figures, he will see that Southend has a budget of £197 million and spends £97 million—about half the total—on education. That is an area that the council would obviously consider
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cutting. However, the Government did not tell it, "You can cut back on that and other areas", but instructed it that although its increase is £5.1 million, it must spend an extra £5 million on education because of ring-fencing. As the council is obliged to spend that sum of money on education, in effect there is no increase at all. What about social services—again, a huge spender? How on earth can the council cut down on social services, given the multitude of problems faced by Southend and other seaside towns? Furthermore, some spending increases cannot be avoided—for example, the financing of pension funds for the staff, which involves an extra £1.5 million. There are many other such items.
The Minister is obviously enjoying the conversation that he has been having with his neighbour during the past six minutes while I have been speaking, but I hope that if he cannot listen now, his officials will at least ensure that he reads about this and considers it carefully. Incidentally, although I asked for a meeting to discuss it, I was told for the first time in 40 years as a Member of Parliament that that was not possible.
The one and only area where the council does have freedom is in leisure, recreation and arts. That has necessitated an horrendous and cruel list of cuts in vital services for the community. There are plans to close five community centres, some of which provide vital services in deprived parts of the town, and to close the Palace theatre. There is a significant and detailed plan of 12 separate cuts. As I am sure that my hon. Friend the Member for Southend, West (Mr. Amess), who attends to these matters vigorously at all times, will confirm, the council does not want to go ahead with these proposals, but what on earth is it meant to do if it wants to stay solvent?
I appreciate that drawing up complex funding plans can be difficult, but I hope that the Minister will accept that his proposals are brutally unfair to Southend and its people. If he had time to come and visit us, he would realise that it is an area where more help is required and the needs of the community are very substantial.
The Minister said at the beginning of his speech that he intends to bring forward some revised plans to take into account certain changes. He should bear in mind the fact that the census has denied us £1.5 million to which we are entitled and that Southend, like other seaside towns, faces massive social problems. I hope that he will think again about a settlement which, although generous overall, has done a brutally unfair service to Southend-on-Sea and caused great distress to its people, including borough councillors of all parties.
7.8 pm
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