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8 Dec 2009 : Column 231

Mr. Denham: My hon. Friend is absolutely right. Material of that sort, financed from Belize or wherever else, is dropping through letterboxes all over the country. There is a serious point at issue, because the 39 per cent. increase in real funding for local government achieved under the Labour party has made a huge difference to the quality of local services and the development of services such as Sure Start and Building Schools for the Future. That is jeopardised by the promises of the Conservatives.

Not only have the Opposition made clear that they would cut council spending now, but they would scrap house building, because they could not match our housing pledge just when that money is helping the country through the recession. They would impose top-down cuts on front-line services, as their shadow Chief Secretary has said in two interviews, and they would abolish regional development agencies and regional economic support, a policy opposed by the CBI. Fears on that front were not lessened when the hon. Member for Meriden personally intervened last summer to try to halt economic recovery by instructing Tory councils not to co-operate with making land available for growth, housing and jobs. They would do away with all entitlements to decent public services and make the postcode lottery the defining principle of a Tory Government.

In Southampton, Conservatives say that they will privatise, not for the good of the public but for ideological reasons. In Hammersmith, they say that tenants should lose security of tenure so that they can be evicted when the council no longer thinks they need a home and says they are hard to get rid of. In Barnet, we are promised a Ryanair council-presumably one that offers only the most basic standard of service, full of extra costs and hidden charges, and which everyone has to pay twice, once in council tax and once in charges just to get a decent service. The truth is that the future of local services is bleak under the Conservatives. They say that Conservative councils show what a Conservative Government would be like, and I agree. It is a fair warning.

Rosie Cooper (West Lancashire) (Lab): The proof of the pudding is in the eating. What would the Secretary of State say to a council that is a net gainer from concessionary travel and pockets the difference, depriving pensioners, refuses to give free swimming to under-16s and closes cash offices? Its deputy leader, when asked whether it had consulted, said, "Why consult when the answer would be no?" That is how much it cares. It has cut sports development officers, all the while having £22 million or £23 million in the bank-

Madam Deputy Speaker (Sylvia Heal): Order. I think the Secretary of State has got the message from the hon. Lady.

Mr. Denham: I get the gist, but I must tell my hon. Friend that there was a streak of honesty from the Conservative leader of the council who said that it was not worth consulting if nothing was to be agreed. That is refreshing compared with what we have heard this evening, but I agree with her.

On concessionary fares, which I was going to come to later, this Government have introduced free bus travel for pensioners, which is a great breakthrough. There are
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two truths behind that. First, all the evidence is that the funding nationally is the right amount for the concessionary fare scheme. Secondly, it is also the case-this was acknowledged by the Department for Transport just a few weeks ago-that we needed to make some changes to the distribution of funding, because as the system came in, we could see that some areas were gainers and some were losers. That was the right thing to do. I do not believe that there would be free bus travel for pensioners under the Conservatives. Even if adjustments in the formula have been proposed for the future, that reallocation was the right thing to do.

As for a local authority that takes the benefit of that and does not plough it back in-that is a real shame. The hon. Member for Bromley and Chislehurst said that free swimming was not fully funded, but there was a deal for local authorities. Labour councils thought, "That is a good deal for our people, so we'll have free swimming," and Conservatives councils turned round and said, "We're not going to do it." There is a difference between the parties. The offer was the same to both: the Conservatives said no in place after place, and the Labour councils said yes. That is the difference.

Mr. Cox: What would the Secretary of State say to the 92-year-old lady who knocked on the door of No. 10 Downing street yesterday in tears because her wardens had been removed from her sheltered housing, and the hundreds who walked from Trafalgar square to Downing street who are also finding, in all councils around the country, a relentless cut in the social services for the disabled and the elderly, presided over by this Government, because of an unfair funding system?

Mr. Denham: I would never make light of the position of a 92-year-old woman who was worried about her personal circumstances, but my understanding is that that demonstration was from Conservative-controlled Barnet council.

Mr. Cox: Wrong! They came from all round the country.

Mr. Denham: Perhaps it was not, but those I saw were from Barnet. It is right that local authorities make the best use of support. Some have chosen to remove warden support and others have found other ways of providing appropriate support for local people. I would expect any local authority to make the right decisions to provide the appropriate levels of support for the elderly people whose care they have assumed.

Bob Spink (Castle Point) (Ind): Does the Secretary of State think that local authorities would do better to spend some of their funds on the services that have just been mentioned, rather than on unjustified and excessive salaries for many of their senior officers, who do not even treat the public with civility?

Mr. Denham: I am sure the hon. Gentleman will have been very pleased by the statement made by my right hon. Friend the Prime Minister yesterday, which echoed and added to what I said at my party's conference. The people at the top of local government often have a lifetime of public service behind them-they are not bad people-but things have got out of hand, and we need to deal with that.

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Mrs. Humble: The Secretary of State mentioned a moment ago the key role of RDA's and the threat that they are under from the Conservatives. What would be the effect on Blackpool if the Northwest Regional Development Agency were scrapped? The RDA has identified the needs of Blackpool and the need for regeneration, and it has invested in the town.

Mr. Denham: The reality is that if RDA funding and RDAs were removed, the remaining funding-funding that was not simply cut to fund inheritance tax for wealthy families-would just be distributed on a formula basis. I pay tribute to my hon. Friend who has worked so hard for her constituency. Blackpool is coping with huge economic and social changes, and changes in the tourist market, which needs concentrated, focused effort, on behalf not just of the town, but of the whole region. The problem is that there would be no mechanism for providing that without RDAs. The money would either have to come from central Government, or it would be completely dissipated. That would be a disaster, which is why so many people, including house builders, and those in the CBI and chambers of commerce, are so alarmed by the Conservatives' irresponsible proposals.

On grant distribution, we are told that money is being taken from the south and the midlands to go somewhere else. The fact is that the two largest gainers from grant distribution were the east midlands and the south-west, hard though that is to fit with the idea that money is being taken away from the midlands or rural areas. Two of the largest increases in the formula grant of any authorities in the country were in Dorset, at 7.1 per cent., and Somerset, at 5.5 per cent. That is hardly evidence that resources are being shifted from the south or from rural areas.

The truth is that the Government work as hard as we can to produce an objective basis for formula grant. It is widely discussed and widely debatable, and I do not see why the debate should not continue, but the argument that the system has been in some way manipulated just does not stand up to the fact of where the increases in the allocations that we are discussing are going in the coming year.

I have criticised the Conservatives, but I do not rest my case on that criticism or on our record of investment and support for local government. The truth is that we place local government at the heart of meeting the challenges that face this country. The hon. Member for Bromley and Chislehurst talked of Total Place as though it was something that would come as a surprise to Government, rather than being an initiative that was launched in the Budget last year by my right hon. Friend the Chancellor for the Exchequer. The 13 pilot projects to which the hon. Gentleman referred were set up with local authorities and other public services by the Government, and they report to a ministerial Committee that I chair.

I am pleased that there are 70 or more places doing the same thing as Total Place, because it shows that we are going in the right direction and that the public services can be further improved and made more efficient if we can look at all the public service spending in one area. Yesterday's "Smarter Government" paper set out a series of new flexibilities for local government to support that role-easier pooling of budgets, fewer targets, better organised inspections, a reduction of
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£100 million in the compliance costs for local authorities, single capital budgets and reducing the number of funding streams. These are developments for the future-

Robert Neill: It won't be your Government who do it!

Mr. Denham: The hon. Gentleman may come unstuck with his cockiness about that. On this issue and on many others, the values and policies of my party are much closer to what the people of this country want. Before he gets carried away with himself, I remind him that the election is yet to be held and we are determined that what we think are the right policies for this country will win out-and my right hon. and hon. Friends agree.

Yesterday's paper promised a transformation in the amount of data about local services, costs and quality available on the web in a form that enables the public to scrutinise, to compare and to propose better ways of running services. Money will be tight, so we back a rebirth of municipal enterprise and the expansion of trading to generate new streams of income. All this is backed up by our commitment to give councils the powers that they need to scrutinise effectively public service spending in their area.

I am pleased that we have had this debate, because it has enabled us to set out clearly that we have had another good settlement for local government. It is a settlement that will lead to the lowest council tax increases for 16 years at least, and to the protection and improvement of public services. The debate has shown the Conservatives as having no policies and no views on how to protect public services for local people, whereas the Government believe in local government, work with it and support it.

8.28 pm

Julia Goldsworthy (Falmouth and Camborne) (LD): It is useful to have this debate in the absence of the Government providing us with time to discuss this year's local government settlement. Although I was not expecting it to be so bad-tempered on the part of the Secretary of State, I did know that the hon. Member for Bromley and Chislehurst (Robert Neill) is always good value on this subject.

I am not sure that the Secretary of State's remarks can be squared with the fact that we were not to debate this subject. He has just said that local government is at the heart of government, but his Department did not deem a debate necessary. In the debate on the settlement last year, some important points were raised. We talked about the expected average council tax increases and the delivery of efficiency savings. We still have questions outstanding about resources invested in Icelandic banks, as councils still do not know when they will get those back. We also debated the impact on councils of falling incomes from charges. All those issues are still relevant today, as are the issues that hon. Members have raised about the impact of the current formula on their local authority. I cannot see any reason why a debate this year would not have been as valid as the one a year ago. If the Government really do have local government at the heart of everything that they believe in, why did we not have this debate in Government time and why was local government not mentioned at all in the Queen's Speech?

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Barry Gardiner: The hon. Lady mentions charges. Can she explain why her Liberal Democrat colleagues on Brent council raised charges for elderly care by 300 per cent. at the same time as they broke their promise not to increase the council tax? Those are the issues about charges that concern my constituents in Brent.

Julia Goldsworthy: And they are exactly the kind of issues raised in last year's debate about the funding formula, so I look forward to the hon. Gentleman's contribution on how he thinks the current funding arrangements are impacting on Brent. Hon. Members would be grateful to hear about that.

Barry Gardiner rose-

Julia Goldsworthy: I want to make some progress. The hon. Gentleman will have an opportunity to make a speech.

The Secretary of State said that we do not need to have a debate every year because we have had a three-year funding settlement. There is a consensus that long-term funding settlements are a good thing because they allow for better planning. However, the fact that we have a spending review every three years does not mean that we do not have a Budget every year. I cannot understand the logic.

To be fair, the Conservatives' motion contains several valid observations about matters such as the increasing unaffordability of council tax and the extent of the above-inflation rises that we have seen every year for the past 10 years. The comparison with the increases in the state pension is also valid, although it was the Conservatives who removed the link with earnings, which has made the problem 10 times worse. There are also valid observations about some of the spending pressures on councils, and the motion refers to one of them-the recent announcement on social care.

Other policies, however, such as concessionary bus fares, have already impacted on local councils. Regardless of what the Secretary of State says, as one who represents an area that gets a large number of visitors every year, I know that the costs for local government are not equivalent to the amount of money received. The cost pressures within Cornwall are different as well. If he says that the policy is fully funded, he should take another look at the evidence, because, as far as I can see, that policy represents a massive additional cost for several councils, which they struggle to meet.

The same can be said of the cost of meeting swimming targets, which are a difficult burden to manage, particularly in areas that are popular tourist destinations. Many of those areas are rural areas and a long way from their targets. The Secretary of State said that some of the biggest increases are in the south-west, but I would imagine that that is because those areas are the furthest from their targets and have the greatest distance to travel to reach them. That means that they are scraping along the bottom trying to reach the per-head funding that the Government say they should receive.

Mrs. Humble: I, too, represent a popular tourist destination. Is the hon. Lady aware that the Government negotiated the original formula for distributing the money for the pensioners pass with the Local Government Association? All the councils deemed it to be fair.
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Particular pressures have been identified in areas such as hers and mine, so the Government have produced a consultation document on redirecting money from councils making a profit to those making a loss. Does she welcome that?

Julia Goldsworthy: I will welcome it if I hear from my council that all its additional costs will be covered, but previous experience makes its cynicism understandable.

It is not clear to me from the Conservative motion and the comments of the hon. Member for Bromley and Chislehurst what the causes of the problems are. Are they simply a consequence of Government policy, or are they fundamental problems inherent in the structure of the local government finance system created under the Conservative Administration?

Mr. Redwood: Is it the hon. Lady's party's intention to introduce the 1 per cent. levy on higher priced homes every year? Who would be responsible for the valuation of the properties and who would pay that bill?

Julia Goldsworthy: As my hon. Friend the Member for Twickenham (Dr. Cable) has made clear, we are talking about a national tax of 1 per cent. of the value of properties over £2 million, which will be put in place until measures can be fully implemented to replace the system of council tax with a local income tax.

Mr. Redwood: Every year?

Julia Goldsworthy: Yes, it would be an annual tax. We are quite clear that the current taxation system is unfair, but rather than simply making observations about the fact that it is unfair, we have sat down and tried to come up with a package of policies to make the whole tax system fairer, not just locally but nationally.

Essentially, what we see in the Conservative motion is some interesting observations, albeit ones that are self-evident. However, I am not sure that we have had any analysis of what the problems are or what the alternative is. We have heard a lot about Total Place and the "Deliverying more for less" document and the savings that they can deliver. As the hon. Member for Bromley and Chislehurst said, "More for Less" is a document produced with cross-party agreement, but some of the conclusions that can be drawn from it are interesting. The implications of the report are that ring-fencing needs to be reduced to help delivery and that all local public service delivery agents need to sit round the table and to have the money at that table. However, the implication of that is un-ring-fencing things that are not just part of local government finance, and I have heard nothing, either from the Conservatives or from the Government, about whether they are prepared to go that far.

The hon. Gentleman also spoke about growing the tax base. Putting that proposal in the context of my constituency, as far as I can see it means that councils will receive more money for building more expensive houses in the areas affected. However, given the current gap between income and house prices in Cornwall, all I can see is that instead of central Government targets driving probably inappropriate development in some communities, financial pressures on councils will drive forward such development. Instead of responding to housing need, we will have centrally driven targets replaced by developers' greed. I am slightly concerned about that.

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