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20 Feb 2008 : Column 86WH—continued

Time and again, with this Government, we find ourselves in a situation where funding is hailed in a great fanfare
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one year, only to be ripped out of a community the next after yet another departmental rethink. When will the Government learn that continuity and stability are keys to community development and renewal across the country? Irrespective of the merits of the arguments for the neighbourhood renewal funding and the working neighbourhood funding criteria, I would be interested to hear from the Minister what the administrative costs were of migrating from the old funding stream to the new.

The Government are well known for their five and 10-year plans and for their insistence that local authorities should plan for the long term, yet it appears that authorities do not know, from one year to the next, how much funding they are to receive. That point was touched on by other hon. Members. How are large metropolitan areas such as Leeds supposed to plan for the long term if they are constantly susceptible to the year-on-year, see-sawing of ring-fenced grants?

Hon Members in West Yorkshire will be familiar with the sorry saga of the Leeds supertram project, cancelled in favour of a bus rapid transport system, which seems to sum up the Government’s casual waste and complacent attitude to taxpayers’ money. Both the National Audit Office and the Yorkshire Post, with its admirable road to ruin campaign, have highlighted the £3 million of taxpayer-funded money wasted on this project for seemingly dubious reasons.

Along with my concerns about the incessant changing of funding streams and allocations by this Government, I would like to draw hon. Members’ attention to what I would describe as the overcomplicated interconnections between funding streams, which was brought out by the hon. Member for Leeds, East. We are often told, “You have missed out on y funding, because it is connected to x funding”. He made the point earlier about how significant additional funding streams appear on the surface to be directly linked to working neighbourhood funding in respect of issues such as migration and funding from the Department for Work and Pensions. Something surely must be done to simplify this convoluted system or we will end up with permanent and entrenched winners and losers where it is literally “winner takes all”.

Conservatives believe that regeneration is a social responsibility and want radical reform of regeneration funding and a clear rationalisation of the vastly inflated and unnecessary number of funds. However, that must be done through a systematic and sensitive programme. We will reduce the number of delivery vehicles causing delays and confusion of direction and accountability and, as I alluded to earlier, provide a stronger role for elected local councils. We will radically overhaul the flawed pathfinder scheme, which is resulting in the unnecessary demolition of Victorian terraces in North-East and East Yorkshire and profits for speculators, reinvesting the funds in genuine locally led regeneration schemes. Furthermore, we will allow local communities to introduce new social enterprise zones to promote social enterprises and to help disadvantaged communities.

Over the last 10 years, and certainly the last 20, there has been a great opportunity for places such as Leeds to do something systematic and profound about welfare dependency. Instead, owing to unfettered migration, as
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alluded to by hon. Members, we have entrenched welfare dependency for short-term benefit. That has been felt across the country.

The final report from the Cities Task Force on urban regeneration, under the chairmanship of Lord Heseltine, is eagerly awaited by hon. Members on both sides of the House. Without wishing to pre-empt its findings, it is well known that the Opposition want a great deal more money collected and spent locally. Local authorities need to be given the freedom and responsibility to raise and spend how and when they see fit. They must not be forced into short-term, ring-fenced spending that benefits no one. That is not a view shared by Opposition politicians only. Even the opposition Labour leader on Leeds city council, Councillor Keith Wakefield, has argued that his Labour colleagues need to rethink their business rates policy and to look at returning locally raised money to local councils.

The real issue is welfare dependency, which, after all, is at the hub of much of the requirement for urban renewal. Here Government failure is rife: child poverty rose by 200,000, after housing costs, in 2006.

Colin Challen (Morley and Rothwell) (Lab): I would be interested to hear whether the hon. Gentleman has any influence in Leeds city council, which is a Conservative-led body. It recently raised tens of millions of pounds through the sale of Leeds Bradford airport. It should spend that money tackling deprivation by providing better transport throughout the city and, perhaps, even a bus station in Morley, which we do not have, despite being a town of 25,000 people. That would help to get people into work with more mobility. Will he write to his colleagues on the council and urge them to do that?

Mr. Jackson: I would be delighted to visit and speak with my colleagues on Leeds city council. The Leeds administration is a breath of fresh air. In the spirit of consensus, I find it refreshing that it is sticking up for Leeds in the way that it sees fit, as are hon. Members today, without fear or favour of the party in power.

Some 2.8 million people are claiming out of work benefits and 15 per cent. more young people are not in work or full-time education than was the case in 1997. The number of people in severe poverty increased between 1997 and 2005. The Government should be concentrating on upskilling the population to allow people to escape the trap of welfare dependency, to become home owners, to participate in the democratic process and to make a worthwhile contribution to their local community. Rather than funding following the problem, it should be going to the root of the issue.

Investigation must also take place into the possibility of competitive bidding for funds. Failing authorities—of course I do not include Leeds in that category—should not always be propped up by Government money. Good money should not always follow bad. Some local authorities, just like some Governments, use public funds in much more efficient ways than others and they should be rewarded with more funding and flexibility.

I commend the hon. Member for Leeds, East, who is an experienced and well respected parliamentarian, for putting the interests of his constituents before the need to toe the party line. It is for him to have a debate with his party colleagues during the time that they have left
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in government. It is not for me to comment on the merits of whether Leeds or any other local authority should receive local neighbourhood funding; there will always be winners and losers in such an exercise, and it would be inappropriate, when the criteria have been set, for me to comment. However, the bigger, strategic issue is whether the Government’s horrendously complex and convoluted funding process is fit for purpose. Members will not be surprised to hear that I believe that it is not. Under a Conservative Government, it will be simplified, and we will end ring-fencing and the regionalisation of local government. The renaissance of cities such as Leeds will be about restoring authority, autonomy and civic pride to local government, and it will have their people at its heart.

10.50 am

The Minister for Local Government (John Healey): I follow the hon. Member for Peterborough (Mr. Jackson), although I have less time than he took. I shall do my best to respond to my hon. Friend the Member for Leeds, East (Mr. Mudie), whom I congratulate on securing today’s debate, and to the points raised in today’s debate. He has been strongly supported by my right hon. Friend the Member for Leeds, West (John Battle) and my hon. Friend the Member for Elmet (Colin Burgon). The Leeds MPs tend to hunt in a pack, and my hon. Friends the Members for Pudsey (Mr. Truswell) and for Morley and Rothwell (Colin Challen) are also present.

I understand completely the strength of their pride in Leeds as their city, and how strongly they feel about its prospects and the problems that it still needs to tackle. I am ready to discuss in detail the working neighbourhoods fund decisions that I have taken, and the potential for a range of other funding sources that will go into Leeds to help deal with regeneration in the next few years. However, I am prepared to do so only on the basis of the facts, to which I shall return in a moment.

My hon. Friend the Member for Leeds, East knows that we published the sub-national review of economic development and regeneration in July 2007, which was followed by extensive discussions. We set out the view that there has been massive progress in dealing with areas of disadvantage and deprivation over the past 10 years, but that there are deeply entrenched and persistent pockets of deprivation and that the future of any regeneration funding that followed the neighbourhood renewal fund would need to be more intensively focused on fewer areas, distributed on the basis of neighbourhood-level analysis, which is more finely tuned than ward level, and more sharply focused on the factors that help drive and regenerate the economy, in particular worklessness and enterprise, which my right hon. Friend has recognised.

John Battle: Will my hon. Friend give way?

John Healey: I shall just finish this point.

My hon. Friend the Member for Leeds, East has rightly said that work is the main way out of poverty for people, because it provides greater dignity and independence not only for the person who gets and stays in the job, but for the whole family and the wider community. I shall give way to my right hon. Friend the Member for Leeds, West, and then I shall deal with the points that have been raised in the debate.

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John Battle: I want to pick up on the word “pockets”, because I do not want the Minister to be seduced by the idea that there are just tiny pockets of deprivation. My hon. Friend the Member for Leeds, East has introduced a way of examining areas in detail through the benefit system to show that a lack of training, skills and jobs is increasing, not decreasing, in substantial areas of the inner city under this Government. That is the problem, and simply to say “pockets” suggests that there is just a bit of mopping up to do. The situation in the inner cities is getting much worse.

John Healey: I do not mean to imply anything by saying “pockets”. I want to say—I mean this, because I have studied the figures—that there are areas of disadvantage that we have not shifted in the past 10 years, despite successful and massive investment, so we must do things in a more concentrated way and a bit differently. In particular, we must concentrate on worklessness and skills in the local economy, and I shall come on to that issue.

There are at least four points on which I must set my hon. Friend the Member for Leeds, East straight. He has said that the partnership arrangement between central Government and the city, which has been in place for more than 30 years, has been ended by that decision. That is not true, and I do not accept it. He said that the working neighbourhoods fund was the only investment in regeneration—especially through work—that would have gone to Leeds. That is not true, and I do not accept it. He said that no resources will go to the city in the next three years to help people become skilled and get into work. That is not true, and I do not accept it. Finally, he said that people in the remaining deprived wards are of no interest to the Government. That is not true, and I do not accept it.

I shall examine the expectations in Leeds on future funding for regeneration with my hon. Friend, but it is important that he understands that I cannot accept the council’s expectation of either £54 million or £52 million under the working neighbourhoods fund, if the council had been eligible. I shall also examine with him in detail whether the figures that we have used as the basis for decisions on the working neighbourhoods fund and the methodology for eligibility are accurate. I have checked and re-checked those figures, and I have had independent figures check the Oxford figures. I shall let him and the council have the figures and the detail of the methodology by the end of the week.

I understand that my right hon. Friend and hon. Friends are upset that Leeds has lost out by failing so closely to meet one of the three eligibility criteria, but my hon. Friend will understand that when taking any decisions, there must be a consistent basis for allocating funding. Once that basis, threshold or formula is set, it must be applied consistently, which is what I have done in the case under discussion. Leeds, like 21 other local authorities, including my own in Rotherham, has not qualified for the working neighbourhoods fund as it did for the neighbourhood renewal fund. In many ways, however, despite the remaining regeneration challenges and deprivation in Leeds, that is testament to the success of the city and some regeneration efforts.

Leeds has fewer neighbourhood areas—the lower super-output areas—among the most deprived 20 per cent. areas in England. In 2004, it had 151 such areas;
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last year, the figure was down to 131. At the same time, there has been an increase in the number of areas in Leeds among the top 20 per cent. least deprived areas: the figure was 56 in 2004, and 75 in 2007. The number of children in workless households over the past three years has reduced at a faster rate than throughout the country. It is still higher than the average throughout England, but it has reduced at a faster rate than the rest of the country, which is testament to some of the efforts and success in Leeds locally. The working neighbourhoods fund situation is not a product of statistical blips.

On the neighbourhood renewal fund, we were clear from the outset that it was time limited and coming to an end. My hon. Friend’s city authority received £63 million from that fund from 2001 to 2008. As a former Minister, who was responsible for setting up the Learning and Skills Council, he will appreciate the following point better than most: we have always said that in the end, the key issue is about the way in which one mainstreams funding programmes and the work of mainstream agencies to one’s regeneration efforts; the issue is not simply about the funds that are invested.

In order to avoid the cliff to which the hon. Member for Putney (Justine Greening) has referred, we are providing transitional funding, including some for Leeds and the other 21 areas that qualified for neighbourhood renewal funds but not for working neighbourhoods funds. There are several areas where funding not only has gone in, as my hon. Friend has rightly pointed out, but will go in over the next three years.

Justine Greening: Will the Minister give way?

John Healey: No. I have less than a minute. The hon. Lady should talk to the hon. Member for Peterborough about that.

The area-based grant has no strings attached, and it is worth £49 million to Leeds next year. Leeds is one of only 29 areas that receive local enterprise initiative funding—£15 million. There are also Jobcentre Plus, special programmes including the new three-year pathways to work programme for Leeds, European funding, single regeneration budget funding, regional development agency funding and new local authority business-growth-incentive funding for next year. Furthermore, through the local area and multi-area agreements, there will be a chance to pull those measures together, and put pressure and a duty to co-operate on other agencies, which has not been possible before. Those measures potentially put the council in the driving seat, and I hope that it will work with me to ensure that the priorities of worklessness, skills and regeneration are tackled in Leeds.

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Development Aid and Oil Extraction

11 am

Mr. Andrew Smith (Oxford, East) (Lab): I welcome this opportunity to raise important issues about development programmes being used for oil extraction and the need for an alternative approach that prioritises poverty reduction and combating climate change.

The matter was originally drawn to my attention by the “Ditch Dirty Development” campaign led by People and Planet. With its national headquarters in my constituency, and engaging many university and school students throughout the country, People and Planet is one of the principal agencies through which young people are engaging with environmental and development issues. It is to be commended for helping to build wider active involvement and commitment, which is essential in sustaining pressure to carry forward the drive to combat global poverty and its causes, on which Labour in government has a good record but on which we always want to do more. I am grateful to People and Planet and to Oxfam, which I am happy to say is also based in my constituency, for their helpful briefings for the debate.

The “Ditch Dirty Development” campaign has engaged some 20,000 mainly young people across the country in 32 university, college and school groups, collected thousands of signatures on petitions, met MPs and put points to the Government. I was pleased that last month, my hon. Friend the Minister’s ministerial colleague, the Under-Secretary of State for International Development, my hon. Friend the Member for Harrow, West (Mr. Thomas), visited Oxford directly to discuss with local school and university students the issues raised in the campaign. I know that that was not the first such meeting that he has held. There is a helpful dialogue in which young people engage with Government on some of the most vital issues affecting the planet.

It is right that those issues are also brought here to Parliament. The case that the campaign has been pressing is that because of climate change and the adverse impact that fossil fuel extraction projects often have on local people and the environment, the presumption should be against aid for such projects. At the very least, a stringent assessment should be undertaken of such projects’ impact on poverty reduction, economic development and carbon emissions, including the extent to which they increase dependence on fossil fuels.

My purpose today is not to knock the oil industry. Getting the stuff out of the ground all round the world and into cars and boilers on demand is a formidable economic and logistic achievement, which is often hazardous. As we now know, however, it is not sustainable for the future. Oil companies examining alternative renewable and environmentally sustainable energy sources is greatly to be welcomed, but we must remember that whatever ethical and environmental responsibilities they acknowledge or are forced to acknowledge, their core purpose is to maximise shareholder value by running profitable businesses and not to reduce poverty or to develop sustainable energy sources to meet local need.

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