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May I focus on the local area agreement, about which there has been a great deal of talk. The original proposal was for a local scheme with little central control, but I hope that the Minister will look at it, because it has become a monstrosity. There are 180 pages of guidance, and statutory duties and ministerial powers of intervention are to be introduced. There are 60 targets, extensive six-monthly reports on the targets to Government officers and a huge raft of bureaucratic procedures for local partners. The Minister looks a little puzzled, so I will not continue with that list, but the problem does not concern his Department alone. The Department for Education and Skills has more than 150 targets for children; the Department of Health another 100 or so for adults; the Department for Transport has its own set of targets, as does the Department for Environment, Food and Rural Affairs. Having just been hit with a demand for tax because it is the end of the tax year, I am sure that excessive numbers of civil servants are dealing with what is
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produced with excessive numbers of bureaucrats in local government, especially as local area agreements do not provide any real results on the streets.

I urge the Minister to consider the points that have been made by Members on both sides of the House about the care of the elderly and the mismatch between the NHS and local government. He may smile at my next request. He and I have both mentioned his favourite local authority. I urge him to take a deep breath and come with me, without officials or anything else, to listen to the people at the front line of what, I believe, is one of the most efficient local authorities to learn what could be done to take the bureaucratic load off local government and still give central Government what they want. It would be good business, and because of gearing it would have a dramatic effect on council tax. Will the Minister accept the challenge?

5.47 pm

Mr. Mark Prisk (Hertford and Stortford) (Con): It is a great pleasure to follow my hon. Friend the Member for Mole Valley (Sir Paul Beresford), who touched on one or two points that I wish to make. I shall therefore try to abbreviate my contribution accordingly.

May I begin by praising the work of many local authorities? Whether at parish, town, district or county level, councils often provide crucial services. They educate the young, provide care for the elderly, keep the streets clean and often help to keep our communities safe. I suspect that everyone in the Chamber has criticisms of certain decisions or oversights, but local councils employ thousands of unsung heroes who, day after day, make a real difference to our constituents’ lives. Local councils, however, often have to make difficult and unpopular decisions. On waste management, for example, it is local authorities that make the difficult decisions on the ground. Local government therefore deserves a financial settlement that fully reflects changing needs and rising expectations.

As we have heard, Ministers claim that local government has received a generously funded settlement since 1997, and they cite a real-terms increase approaching 40 per cent. Once we strip out all the ring-fenced grants, not least for education, the increase is, as we heard earlier, just 14 per cent. in real terms. In other words, there has been a measly 1.5 per cent. per annum in the past nine years or so. In Hertfordshire, our general grant has increased in cash terms by 52 per cent. over the past 10 years. Some 46 per cent. of that increase has been required simply to cover inflation and Whitehall-led changes in formula and functions. As a result, our councils have received only a 6 per cent. increase over 10 years to cover other cost pressures, including, as we have heard, the rising burden of care for the elderly.

At the same time, the Government have piled new statutory responsibilities on to councils, tying them up with targets and red tape. Like my hon. Friend, I looked at some of those targets. Since 1997, Ministers have, between them, generated 1,500 performance targets, 734 objectives, 273 measures, 183 aims, 66 value-for-money targets, and 11 standards of maintenance, so they have been rather busy, as we can see. The problem is that the cost resulting from all that frenetic activity has proved to be hideous, both financially and in terms of lost time.


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The background to today’s financial statement is one of rising prices. The consumer prices index stands at 3 per cent., and the retail prices index at 4.4 per cent., but energy costs, for example, are rising by well in excess of 10 per cent. Despite rising prices and costs, my authorities, Hertfordshire county council and East Herts district council, have been offered just 2.7 per cent. The settlement completely fails to take into account the real costs of their services. Take the county council; inflation alone will mean £19 million in extra costs. A deliberate pattern has been woven into the settlement. The Government either take decisions that result in new duties for councils, or make settlements that increase their costs.

The county council has experienced a rise in landfill tax, which will cost it another £1.8 million. We heard about NHS cost-shunting earlier, and the NHS is being squeezed in Hertfordshire, too, with many care costs being pushed back on to the county council. Our county hall reckons that that is another £2 million in the coming year. The Government made a proud boast about concessionary fares for the elderly, but the scheme comes without full funding, a fact that we debated earlier. The result is that East Herts district council will have to find more than £730,000 next year for a deal over which it has absolutely no say. Every year, both councils continue to pay for the Chancellor’s decision to raid pensions by scrapping advance corporation tax relief. The result for the county authority is another £1.5 million of expense.

Sadly, the current financial settlement is a classic example of the way in which the Government treat our councils. They give them more jobs, but keep back the money. They announce generous settlements, but get council tax payers to pick up the tab. However, it is not just the Government’s actions that cause problems. They have failed to acknowledge and respond to the changing social demands in our communities. On social care, for example, there is a rapid and continuous increase in the size of the elderly population. That group’s needs and expectations are, of course, considerable. In Hertfordshire, the increased number of adults who need essential support is projected to add another £10 million of cost, next year and every year.

Care costs are projected to increase by as much as 6 per cent. per placement, due in part to new Government standards. I do not doubt that, as the Minister will claim, good intentions lie behind those standards, but I am deeply concerned that those intentions are not accompanied with the money that is needed to make them work. The irony is that good, efficient authorities do not seem to be rewarded. According to the Government, Hertfordshire county council is an efficient authority. It has exceeded its Gershon efficiency target and has made cashable savings of £70 million in 10 years, and it intends to keep to the prudent path. However, because Hertfordshire is a floor authority, its ability to borrow in the way that it thinks best is severely limited.

In Hertford, the Richard Hale school has led an excellent campaign to build a desperately needed sports hall. The scheme has cross-community support and would benefit both the town and the school. Indeed, the county council would like to support it, if it could, but it tells me that because of Government rules on borrowing for floor authorities, it simply cannot help
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the school next year. Its hands are tied. Where is the logic in that? Why tie the hands of good, efficient councils in that way?

The financial settlement is part of a broader pattern. My councils have had their duties increased, and their costs have risen. Their wage bills have been increased for them, and their tax bills have been raised. At the same time, the Government have switched funds away or tied up projects in endless red tape. The result is that council tax bills have soared. Since 1997, the average council tax bill for my constituents has risen by 84 per cent., so that is an 84 per cent. increase for what is essentially the same service. This huge increase is especially unfair on those on fixed incomes, such as the elderly. They cannot hope that a pay rise will bail them out. Instead, they feel they have to cut back on other things to pay a tax that they increasingly resent. It might be their heating, or a birthday present for a grandchild. That is the price of the Government’s policy.

Ministers should realise that my constituents know exactly where the blame lies. Although all councils must strive to be more efficient, the Government also have a duty to provide a fair settlement which does not switch our funds away without good reason, matches funds with new responsibilities, and does not stop good councils backing projects that are valued in the community. That is what my councils and our taxpayers are seeking, and it is what they deserve. I regret to say that that is not what the Government are delivering.

5.55 pm

Lorely Burt (Solihull) (LD): The hon. Member for Mole Valley (Sir Paul Beresford) said that his local authority was on the floor. That is an appropriate description. My local authority, Solihull, is on the ropes and on the floor, having to cope with £7 million worth of cuts this year, as it did last year, with more to come.

I am grateful to be called to speak in this short debate, because the constituents of Solihull feel a deep sense of anger at the settlement that we have received this year. Some Labour Members—there are not many in their place—may think that somewhere as posh sounding as Solihull does not need a big settlement, and that people there earn more, live in big houses and somehow deserve to be left short of income. Solihull is often referred to as the posh bit of Birmingham—a place where Brummies aspire to move out to—but the borough of Solihull contains four out of the 10 per cent. most deprived areas in England. Even in the more affluent parts of the borough, the need for services is great.

Solihull has 16 per cent. more elderly than the national average, or indeed the average for next-door Birmingham. One third of those aged 85 or over need intensive care. Every year Solihull gets the lowest education grant of all the metropolitan authorities, and every year the council overspends its budget for the most vulnerable— for care for the elderly and for children.


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The Conservative-run council has tried hard to balance its books, making hugely unpopular decisions like cutting music services for children and even shutting the public toilets, which caused a public outcry. Visitors, the elderly, parents with children and people with medical conditions cannot go to a public loo to spend a penny. Toilet talk may have its humorous side, but the toilets were closed to save just £220,000, and that is no laughing matter.

To get some investment into the borough, the council has complied by introducing an unwanted and unneeded red route, costing over £4 million. That is £4 million of Government money, so it is said, but in reality it is £4 million of our money, our taxes, misused in useless Government projects when the money could and should have been better spent on children and the elderly.

Solihull is the lowest funded metropolitan borough council in England, and perhaps it should be. Other areas have greater social deprivation overall than we do. But does the Minister agree that in an attempt to redress social deprivation, we have got things slightly out of proportion? Solihull is destined to receive a grant allocation this year of £243.79 per head of population. Next door in Birmingham, the allocation is £582. That is 2.4 times as much.

With a rise in grant of just £1 million, Solihull is bracing itself for major cuts to services, major redundancies, and major losses to everyone of facilities and services. For every £1 per head rise in Solihull, Birmingham gets £17. I do not get it, and I am afraid that my constituents do not either. Can the Minister explain how anyone can work out that a borough with four of the most deprived wards in England, a disproportionate share of elderly people needing care, children to educate, social services to provide, roads to maintain, bins to empty, and so on, can do that on 40 per cent. of the grant of the borough next door and only 53 per cent. of the national average?

The choices for Solihull are stark. Our officers are to be commended that Solihull has achieved an overall three star rating on efficiency and performance, but what is the point in performing so well when you get kicked in the teeth by being starved of funds? With £7 million pounds of cuts to find, the days of belt tightening are over. Even by raising council tax by the maximum possible without being capped, there is no surplus fat to cut, so we are talking amputation time. Perhaps the Minister will explain to my constituents and to those who run the council just how we are to maintain our basic services; and, since we clearly cannot, who should lose out—the elderly, the children with special needs, the environment, or what? Could we have a review of proportionality in setting the formula? We are only asking for fairness and reasonableness. We paid the taxes in the first place; we would just like a little bit more of them back .

6.1 pm

Mr. Graham Stuart (Beverley and Holderness) (Con): I should like to discuss the situation in the East Riding of Yorkshire, where the local government finance settlement is a tale of light and dark—of community champions fighting community betrayal. It is a tale of outstanding success and outstanding performance by the Conservative-led East Riding of Yorkshire council set against the
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abysmal waste and systematic abandonment of vital rural services by a corrupt and failing Labour Government. The results of this Labour ineptitude, not to mention gerrymandering, are broken care, lost opportunity in our education system, and suffering by the old, the weak, the ill and the poor. Truly, this is a tale of the good, the bad and the ugly.

I will start with the good—it is a delight for me to do so—by congratulating East Riding of Yorkshire council, which is led by the Conservatives and has been transformed under Conservative leadership. In 1996, when East Riding of Yorkshire council was formed, it had the fourth highest council tax in England. In 2006, it had fallen to 245th out of 356. It had a four star rating for benefits in the 2005 English council league, which made a real difference to those with least—as, I am proud to say, Conservative councils so often do around the country. In education, the council is in the top 20 per cent. of performers. It is 17th nationally for GCSE results, with 61 per cent. of pupils achieving five A to C grades compared with 54 per cent. nationally. There has been a tale of continuous improvement in that respect.

The council has a record of extremely good financial management. Last year, it was regarded as one of the three financially best run councils in the country. I am delighted to share with the House the fact that this year it has been made top council in the country in terms of financial management. It has delivered the highest possible score in all areas of assessment: financial reporting, financial standing, financial management, internal control, and—the issue with which I am most proud to be associated—value for money. That is what Conservative leadership has delivered in the East Riding of Yorkshire. In Conservative hands, East Riding of Yorkshire council delivers the best value for money in the entire country. I know that when the electorate are given the opportunity in May, they will seek to re-elect those successful councillors and, I sincerely hope, add to them. That is a tale of outstanding performance by the Conservative-led council.

Now we come on to the bad. Here we have a sustained assault on our rural schools through Labour underfunding. We have a sustained assault by Labour on rural NHS beds, with a proposal to close every single one in my constituency. If the primary care trust’s preferred option goes through, the nearest NHS beds for intermediate care of the elderly will be based in Goole and Bridlington—an hour and a half’s drive away from where people live in villages around Withernsea, Hornsea and Beverley. That is just one way, so we are talking about a return trip of three to four hours—if, of course, people have a car in the drive, but Withernsea is one of the poorest areas in the East Riding of Yorkshire and one of the poorest in the country. It is going to lose every NHS bed and I pay tribute to the GP surgery, which has been fighting against the cut imposed by the PCT appointed by the Secretary of State.

If the Minister asks what relevance this matter has to the local government finance settlement, he should know full well that it is because of the impact on social services. It is because the East Riding of Yorkshire, an outstandingly well run authority, has none the less struggled to deliver care. Last year, there was just a 2 per cent. increase in the money available for either domiciliary care or care homes. That put care home
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owners under complete pressure. When challenged, the East Riding of Yorkshire council told me that it accepted that what it was being asked to do was unreasonable and that it could not be expected to do it.

Justine Greening (Putney) (Con): Does my hon. Friend agree that it is not only services that are often pushed on to local authorities—for example, when hospitals do not have beds and elderly people go to social services earlier than they would have done—but that the level of inflation in the budgets is also important? In my part of London, the budget inflation for social services is upwards of 6, 7, 8 or 9 per cent. Does my hon. Friend face similar problems in his area?

Mr. Stuart: My hon. Friend is quite right to point out that inflation is running at higher than the standard rate in many areas, which has often been stoked by the Government’s behaviour.

Labour has been running a sustained attack on rural schools and rural NHS beds, as I said. We are also losing rural dentists. Under the new contract, two out of three dental surgeries in Hornsea closed. There is also a sustained attack by Labour on post offices, with an announcement that thousands more are at risk. Labour has launched a sustained attack on the funding of social care and there has been a sustained failure to support transport. Not only does Yorkshire receive an unfair share of the transport cake, but my constituents were shocked to learn that of the money given across Yorkshire last year, 85 per cent. of it was deemed by the Government to have the greatest need, funnily enough, in Labour-held constituencies. I repeat the figure of 85 per cent.—although Labour holds only half the constituencies in Yorkshire. If we consider the land area covered as well, my constituents will draw the right lesson from that. I pay tribute to the Yorkshire Post for its sustained campaign on the Government’s failure to provide proper transport infrastructure— [Interruption.]

Mr. Woolas: Will the hon. Gentleman give way?

Mr. Stuart: I am sure that the Minister will have plenty of time later to respond to the debate.

That is the tale of the bad. We have done the good and the bad, so now we come on to the ugly. The ugly is the actual impact of the failure to look after rural areas, of the withdrawal of funds and the undermining of services. Who does it impact upon most? As ably set out by my hon. Friends already, the impact is greatest on those with least. It is they who will be forced to travel the furthest. It is they who will be isolated when beds are removed from the NHS and they who will suffer from the lack of delivery of social care. The poorest and weakest in our society will be the most affected.

I mentioned earlier the 2 per cent. payment for domiciliary care going to the preferred providers in the East Riding of Yorkshire. Typically—and certainly in the urban areas—the people who provide the service are cycling from house to house, often on the minimum wage and on split shifts, to support the elderly and the incontinent. They have only a short time in which to do so, but once again it is they who are paying the price for what the Government have done.


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