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5.43 pm

Alistair Burt (North-East Bedfordshire) (Con): It is a pleasure to take part in this debate. There is a form of friendship among those who have spoken at the Dispatch Box about local government—indeed, I hope that I can call the Minister and my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), who represents our Front Bench, two of my friends in the House.

I know the hon. Member for Falmouth and Camborne (Julia Goldsworthy) rather less well, but she has a very good grasp of the subject, and always speaks knowledgeably and well on it. I was a bit surprised when she said that she was excited—I wondered what I had missed in the debate so far—but she managed to convey why she was excited. From that I took it that she was even excited by the prospect of our becoming the Government. I share that sense of excitement.

The hon. Member for Wigan (Mr. Turner) reminded me of when I was the sponsor Minister for the city challenge project in Wigan. I would like to put on record how much I enjoyed that experience and how much I enjoyed working with the excellent Peter Smith in Wigan. That project was an attempt by the Government to be involved in supporting a local authority when times were difficult. In answer to the occasional jibe that is thrown in our direction about apparently being a do nothing Government at the time of the last recession, I would say that, as the hon. Gentleman will know, there was not much vested political interest in the Conservative party being heavily involved in Wigan through the city challenge project. We were doing it because it was the right thing to do at a difficult time, when we were affected by, if I may say so, a global change in manufacturing, for which we were blamed by hon. Members on the Labour Benches. It is an ill wind that comes round to see another Government being affected by what is apparently a global change and catching the drift of public discontent—in this case, quite rightly.

I want to make some general remarks about the settlement, followed by one or two particular ones. When I spoke from the Dispatch Box a couple of years ago, at the time of the first three-year settlement, I said that I welcomed the certainty that three-year settlements established. Since then, however, we have seen one of the problems with such arrangements. In a land where boom and bust no longer exist, a three-year settlement has some merit, because there is stability and we can plan. In the real world, where it turns out—to the surprise of no one except the Prime Minister—that boom and bust have not been abolished, the deficiencies
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of a three-year settlement become exposed. The settlement is subject to pressures that no one could have imagined at a time when certainty was guaranteed. As we all know, those pressures come into the equation and cause difficulties, a number of which have been mentioned.

Investment income for local authorities, and income from property, searches and business rates, constitute a relatively small sum compared with the overall settlement, but because of the tightness of gearing in local authority finance, they actually constitute quite a significant amount. The pressures from these changes and the impact of the credit crunch on local authorities, which colleagues on both sides of the House have identified, are very real. The Local Government Association has published a series of figures, but I will not read them out because the Minister knows them well. Those new pressures have come into the equation, but some of our original concerns with the settlement, which my hon. Friend the Member for Bromley and Chislehurst highlighted earlier and my hon. Friend the Member for Henley (John Howell) has just explained, are still in the system to cause concern.

For example, adult social services remain a worry for everyone in local government because we know that the inflation figures that the Government have calculated do not meet the needs of those who come into the system needing care. That is a source of concern whenever councillors get together. Will the Minister pay particular attention to the transfer of youngsters who have been in care and who, on becoming adults, have found themselves in a situation where provision has tended not to be made, over the years?

I recently visited Hinwick Hall, a special school run by Livability, the organisation that was put together by the merger of the Shaftesbury Society and John Grooms. It cares for a number of youngsters in a residential setting, but the teachers and parents involved are constantly concerned about what will happen to the youngsters when they finish full-time education and leave that environment to go back to their original local authority, because the necessary provision is so often not there.

A growing number of youngsters are coming into that situation, and there will be a need for more provision, not less. I am not sure that the amounts already accounted for in the grant formula for adult social services will meet that need in the future. That will remain a concern for everyone. In relation to cash for highways, the inflation figures often outstrip the figures calculated by the Government. Public care costs, which a number of lawyers in my own area have mentioned to me, are also increasing, as my hon. Friend the Member for Henley has said.

I want to make some particular points about Bedfordshire. The Minister will know all too well the background to the situation there, and whatever hair he did not lose as a result of his previous job has certainly been lost through dealing with those problems. That applies to me as well. Some colleagues might remember that before I went to Bedfordshire I had a full head of hair, played football and all that sort of thing. Bedfordshire has dealt a savage blow to all that.

The background to the situation in Bedfordshire has been the steady rise in council tax—98 per cent. in Bedford borough and 105 per cent. in Mid-Bedfordshire
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district council since this Government took office—and the pressures now being created by the unitary process, which the Minister will understand very well. I have expressed concern in the past that the introduction of the unitary process involved a quick, late decision by the Government, which put extra pressures on the councils involved. Will the Minister reassure me that he will take a very close interest in the work of the excellent implementation teams in Bedfordshire and Bedford councils to ensure that, despite the difficult time scale, the process works?

There was some disquiet locally when both councils announced quite small local tax increases this year. It had been hoped initially that quite significant reductions would emerge through the unitary process—10 per cent. or 12 per cent. was quoted by the mayor of Bedford, but he recently had to announce that he was looking for a rise of slightly less than 1 per cent. That is very different from what was said previously, but I am sure that this is only the first stage and that savings will come from the unitary process as promised, particularly if both councils elect a Conservative administration at the first available opportunity. It is early days; I am sure that more will happen in future.

I would like to take the opportunity to put on record my thanks to councillors who have served on the councils in my constituency that are going to form the unitary council—on Bedford borough council, Mid-Bedfordshire district council and, last but not least, Bedfordshire county council, which will cease to exist in April after more than 100 years of service. Some sterling work has been done there by councillors and the council has largely been Conservative-run through most of its history. In recent years, it moved from being a no-star council to a three-star council over a very short period: it became one of the fastest and best-improving councils in the country.

I was reminded of that fact today when I attended the funeral of Councillor Phyllis Gershon, who recently died in harness. She was 89 years old. I suspect that most Members think very fondly of some councillors for their extraordinary service. Phyllis encapsulated what local authority service really means: genuine commitment to an area; no side; no privilege; doing her work honestly and well. Many councillors have done that over the years and they are responsible, I think, for some of the Government’s success in local government. They have helped the Government to meet targets that were difficult to achieve through Government Departments, and they have done so through the hard work and effort of local councillors. I hope that we would all give credit to them for that.

John Healey indicated assent.

Alistair Burt: In the remaining moments available, I want to bring two or three particular issues to the Minister’s attention. As far as the credit crunch in Bedford is concerned, figures from Bedford council show that it expects to lose about a third of its investment income this year. It used to bring in about £2.6 million, but it will lose about £900,000 this year—quite an amount—from the change in interest rates. If we add in the property, the searches and perhaps section 106, I am slightly surprised that with all that going on, the Minister thought that his original settlement could stay stable.

Secondly, concessionary fares have been highlighted by several Members. Bedford council reckons that it will
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take a hit of about £250,000 on those fares. The Minister is adamant that the overall figure appears to the Government to meet the needs imposed as more people take up the concessionary fare scheme, but many councils have denied that, so I genuinely ask the Minister to reconsider it at some stage. The tight gearing means that these amounts really count for local authorities. If, when the scheme is fully implemented and the figures come in, it turns out that local authorities have lost out significantly, will the Minister give a commitment to looking at it again and make some recompense?

Thirdly, Building Schools for the Future is important for Bedford council. I am pleased about the support it is getting from the Government, but the local education partnership and the financing of the programme have come in for criticism from all sides. I would be keen to know what the Minister includes in the figures for the future financing of the partnership under the new unitary council and how he believes it will be paid by council tax payers in the future. People fear that it could be a considerable amount. I know that the Minister has looked at it very carefully and I accept that this is good news for Bedford council and its schools in the future, but how it will be paid for is a matter of concern. If the Minister cannot address that issue today, perhaps he will do so on another occasion.

Finally, on help for business, I recently had a meeting with the Sandy chamber of trade, which said that it had hardly noticed any difference as a result of the £12.5 billion spent on VAT changes, and that if that money had been put into reducing business rates for small businesses, it would have meant a great deal more. Perhaps the Minister will review this issue in due course and see whether better ways of supporting small businesses can be found than these VAT changes.

We will always have debates such as this. The expectations of local authorities are very high, and the expectation of Government is very high. There will never be enough money to satisfy all the needs, no matter who is in office locally or nationally. The idea of the three-year settlement is good, but it has the flaws identified by my hon. Friend the Member for Bromley and Chislehurst. I am sure that my hon. Friend, like me, looks forward to the occasion when he will sit on the other side of the fence and will have to put some of these difficult proposals into operation.

The Minister, for his part, is rightly proud of his work both in the Treasury and in local government. We know him to be an honest and extremely capable Minister— and in due course, I am afraid, he will make a very good shadow Secretary of State for the environment and local government when he is given the chance.

5.55 pm

Mr. Edward Vaizey (Wantage) (Con): It is a great pleasure to follow my hon. Friend the Member for North-East Bedfordshire (Alistair Burt). As I listened to his speech, I was reminded that Bedfordshire, or rather Bedford, has the largest Italian population in Britain outside London. I think that that is worth remembering during these troubled times at the Lindsey oil refinery. I also congratulate my hon. Friend on promoting the Minister to the next Labour shadow Cabinet.

Alistair Burt: Richly deserved.

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Mr. Vaizey: My hon. Friend clearly has the highest regard for the Minister, which I share.

The debate gives us an opportunity to honour some of the leading lights in local government. I do not think that council leaders are ever given enough credit in the House for the work that they do. Among those whom I know or have encountered is Keith Mitchell CBE—leader of Oxfordshire county council and a colleague of my hon. Friend the Member for Henley (John Howell)—who since the Conservatives took control of the council at the most recent local elections has done an outstanding job in putting its finances in better order while improving services at the same time. I shall say more about that shortly.

I am also thinking of men such as Stephen Greenhalgh, leader of Hammersmith and Fulham council. I know that the Minister received a presentation from that Conservative council last week on the excellent work that it has been doing in reducing council tax while improving services. Then there is a man who, in my view, is not given enough attention in the national press: Mike Whitby, the leader of Britain’s second city, Birmingham. He is a kind of pre-Boris Boris—the first Conservative mayor of a big city for some years—and he has been a superb leader of that city.

What unites the three gentlemen whom I have mentioned—and I have mentioned those three merely because they are the ones whom I know best—is a passion for the areas that they represent, and a passionate desire to give their council tax payers, the residents and the local population the best service possible. That, I think, goes to the heart of some of the frustration expressed by Conservative Members today about central Government’s attitude to local government—the stranglehold in which central Government hold local government, and the almost psychotic wish of central Government not to allow local government the flexibility to experiment or innovate. Local government is simply there as central Government’s whipping boy.

We see from the Government endless initiatives designed to catch headlines, particularly on issues such as free swimming, which concern me as a shadow Minister for Culture, Media and Sport, but also on issues mentioned by other Members, such as free local transport. The Government take the plaudits for those initiatives while expecting local government to pick up the bill. I suspect that the postbags of all Members in every part of the House will have been full of letters from constituents saying “I heard this announced by the Government six months ago: why is the council not implementing it?” We have to tell them that it is because, having announced it, the Government did not give the council the money.

Another thing that all Members will find frustrating is the sheer hypocrisy of Government. I must say that I think it is a good idea for council tax bills to contain details of the efficiencies and savings that a council has managed to come up with. I suspect that Hammersmith and Fulham council will do that without any impetus from Government, because it has a fantastic story to tell about the savings that it has achieved for local council tax payers. It is, however, mind-boggling hypocrisy for the Government to patronise local government by saying, “You will do this, and you will be made to be more efficient,” but heaven forfend that local councils should push back and say, “Well, how about you putting some of the efficiency savings that central Government
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have made on your income tax bills, and the other bills that people receive from the Government?” Central Government spending continues to rise inexorably, while all the time they are strangling local government spending.

My hon. Friend the Member for North-East Bedfordshire alluded to the fact that we have these debates all the time. Particularly for those watching outside the Chamber, there might be the feeling that here we go again—that were there to be another Conservative Government, we might be in this Chamber in some years’ time with Labour Opposition Members complaining about the high-handed acts of central Government. However, I anticipate that there is on the Conservative Benches a genuine appetite for a change in the relationship between central and local government—for more power to be pushed down to local government.

We have talked about my hon. Friend the shadow Chancellor’s commitment to freeze council tax in partnership with councils that will come to the table. The hon. Member for Telford (David Wright) is no longer in his place, but I would remind him that he can put Oxfordshire county council at number one on his list of councils that said they would come to the table for that council tax freeze.

We have also proposed referendums, so that if a council wants to increase the council tax above a certain level, the local people will have a chance to say, “Yes, we approve of that spending; we think it is the right thing to do in the circumstances,” or “No, you’ve breached your covenant with us; that level of spending is too high, so go back and think again.”

We have talked about locally elected police commissioners. That is a radical idea that might frighten the horses, but it is about giving accountability—about allowing local people a say in how local services are delivered. That is very important.

I do not live in cloud cuckoo land; I know that there will always be frustrations between central and local government, particularly while central Government continue to provide the bulk of the funding for local government. However, I believe that our party is on a journey to push power back to local councils. The reason for that is partly historical; we have been in opposition for 10 years, so our opportunity to exercise power has come at the local level. That has given this House outstanding Members of Parliament, such as my hon. Friend the Member for Henley and my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), who is another outstanding local government servant. It has also given us outstanding council leaders and an opportunity to think and innovate.

Let us look at what is happening in Oxfordshire county council. The increase in the budget from central Government is pathetic: it is 2 per cent. in 2008-09, 1.7 per cent. for 2009-10 and 1.5 per cent. for 2010-11. Those budget decisions were made by Ministers because Oxfordshire county council is, of course, a floor authority. In his budget speech, the leader of the council, Keith Mitchell, said—again, they were bitter words of frustration—that we now have a financing system for local government that is

He said that if he was a cynical man he would have believed it was

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That is where we have got to in terms of the relationship between central and local government—a system that is so opaque that even a man who has served at county council level for 20 years, and who leads a county council with a £1 billion budget, cannot make head or tail of it, and neither can his officers—or, I suspect, officials in the Minister’s Department. We must rip this up and start again.

Despite the constraints I have described, the county council continues to deliver value for money for local council tax payers. It has achieved efficiency savings of £40 million, and it will be proud to put that on its council tax bills. It has reduced the rate of increase in council tax from 4.5 per cent. to 3.75 per cent., which is far ahead of its own target. My hon. Friend the Member for Henley alluded to the fact that it has achieved that through greater shared services. The council has other achievements: electronic social care records; the refurbishment of its offices; closer working between the special educational needs department and the primary care trust; putting in place, despite a lack of Government funding, new provision for post-16 SEN—a campaign in which I was closely involved; free parking; and the refurbishment of Oxford city station. Of course, the crowning glory is the fact that it is the first county council to receive a corporate charter mark. I have no idea what a corporate charter mark is, but I am immensely proud that my county council was the first to get one.

John Howell: Let me inform my hon. Friend of what a corporate charter mark is. I happened to be the councillor who thought of the idea of the council’s going for it and then pushed it through. It is a statement to the people of Oxfordshire that the council takes its relationship with them seriously in terms of the customer service it delivers. The thing that excited me was the enormous enthusiasm of ordinary officers and officials in the county council for taking it up.

Mr. Vaizey: I am extremely grateful to my hon. Friend for explaining that to me. I knew when I was about to praise the county council for attaining the corporate charter mark that it was a good thing, but until his intervention I did not realise just how good a thing it was. I know that in his closing remarks the Minister will want to make that point again and perhaps encourage the few remaining Labour councils to apply for a corporate charter mark.

Alistair Burt: Will my hon. Friend speculate as to exactly what it is in the waters of the River Thames that makes Members for Henley have such a grasp of local government and makes them such local government geniuses? No doubt, the next Mayor of London is sitting right in front of us now.

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