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Most significant, having given a clear, one-line promise in their manifesto not to introduce charges for home care, within six months of election the Conservatives introduced charges of £12.40 an hour for home helps. They have substantially cut the home care and resident warden services. I am sorry that the hon. and learned Member for Torridge and West Devon (Mr. Cox), who was complaining about resident warden services, is no
longer in the Chamber, because such decisions are for local government. The Opposition cannot say that local government should have the power to make local decisions and then blame central Government for decisions taken locally. The proudest boast of the leader of my Conservative council is that he has cut 1,000 jobs in three years-1,000 jobs in the middle of a recession-not bureaucrats, but home helps, wardens and other people who provide front-line public services.
The voluntary sector has been cut massively, particularly advice services and services for black and minority ethnic groups. The schools budget has been cut to the bare minimum, while schools have been loaded with additional central costs. So far, so typical.
The next phase of development is asset sales, including youth clubs, community buildings and 13 hostels for the homeless-65 self-contained units of accommodation sold off at public auction, which means that the price received by the council is about 20 per cent. below market value. Sixty-five families who were living in council hostels at a cost to the taxpayer of between £100 and £200 a week will now be in private rented accommodation at a cost of between £500 and £600 a week, but that does not matter to a Conservative council because the income tax payer rather than the council tax payer will pick up the increased bill.
Schools have been told specifically to sell their sites to private education institutions. One has to ask where it is all leading. I shall hold that thought for a moment while I fill in one or two other parts of the canvas in the little time I have for my speech.
I echo the words of my hon. Friend the Member for Erith and Thamesmead (John Austin) in relation to the chutzpah of Conservative councils in claiming credit for central Government initiatives. If Members drive around Hammersmith Broadway, they will see banners hanging from the lamp posts that North Korea would have been ashamed to put up, with claims about the £200 million the council has invested in secondary schools, the £200 million it has invested in decent homes or the 13 Sure Start centres it has opened. The council has taken over a local primary care trust and now even claims credit for investment in the NHS as well.
Mr. Redwood: Would the hon. Gentleman like to praise that council for cutting its council tax by 3 per cent. every year for four years and delivering better services? Is that not smarter government?
Mr. Slaughter: I am so pleased that the right hon. Gentleman has made that point. If he had been listening, he would have heard that about £63 million has been raised through increased charges for services and cuts in services. The service user and the taxpayer get a bad deal out of the average 50p a week saving, every year, on council tax. I shall put the question back to the right hon. Gentleman. If he is such a fan of the Conservative council and its leader, who is head of the Tory party's innovation unit, he will agree, I am sure, with the comment that the leader made at a public seminar 10 days ago, when he said:
"My mates are all in the Shadow Cabinet, waiting to get those"-
"boxes, being terribly excited. I went to university with them-they haven't run a piss up in a brewery."
Actually, the right hon. Gentleman may agree with the comment about-
Madam Deputy Speaker: Order. Can I just remind the hon. Member that moderation in language would be much more acceptable in the Chamber?
Mr. Slaughter: Absolutely, Madam Deputy Speaker. I should have said, "an occasion when a lot of alcohol is drunk in a brewery." However, my hon. Friend the Member for Slough (Fiona Mactaggart) had that argument with a Deputy Speaker, and I believe that excretory terms are permissible, provided that they are in context, as I think the council leader intended that comment to be. It is one that I am sure we all echo.
I do not think that the right hon. Member for Wokingham (Mr. Redwood) made a good point, but one would not know that if one lived in Hammersmith. I wonder what he thinks of this: more than £1 million of taxpayers' money is spent simply on propaganda, and that ranges from poster vans driving around the borough, advertising how good the council is, to advertising on stations, in phone boxes and on lamp post banners, and a fortnightly newspaper that costs about £750,000 to run.
Mr. Redwood: I seem to remember that one of the cuts, as the hon. Gentleman calls them, that the council has made is to include advertising in that newspaper so that it has a nil cost to the taxpayer-unlike its predecessor publication, which was very expensive for the Labour council.
Mr. Slaughter: Sadly, the right hon. Gentleman is partially informed again. There is advertising, and that is principally from the public sector-from the council and other public institutions. However, in addition to that cost, which covers printing, there are on-costs and the cost of staffing, premises and so forth. The total cost before advertising is about £750,000; the net cost is still about £350,000. Again, I put the question to him. Is that particularly good value?
Is it particularly good value that both chief executives of the local authorities in my constituency are paid more than the Prime Minister? Is it particularly good value that, while boasting of a pay freeze for senior officers this year, those chief executives gave themselves up to a 9 per cent. increase last year? Is it particularly good value that the leader of one council attempted to give himself a 14 per cent. pay rise for doing the job that he was already doing? We in Hammersmith do not yet, however, have what Kensington and Chelsea has, which is the first £100,000 a year councillor, topping up his salary with money from London councils and, with great irony, the Audit Commission, too.
In the moment or so that I have left, I shall return to the question that I posed earlier. Where does a local authority go when it has raised charges for vulnerable people, in particular, cut services for people in straitened circumstances and sold off the assets-the schools and the community centres that people use? The answer, particularly in an area of deprivation such as Shepherd's Bush, is quite simple: the local authority gets rid of the people themselves. As my right hon. Friend the Secretary of State suggested earlier, that is exactly what is intended when 3,500 social homes are due for demolition in the borough and there is no guarantee that the residents will receive like-for-like or replacement homes.
The tenants of the first of those estates earmarked for demolition, West Kensington and Gibbs Green, had been told that they live in "not decent neighbourhoods". However, I am very proud to say that yesterday evening they served on the council leader a notice to quit, requiring him under the Labour Government's legislation to transfer ownership of their estate to them. They are going nowhere; they are staying in the place that has been their home for many years; and they hope for the return of a Labour council, which will restore to them some of the services that have been cut.
In the meantime, the council's plans range at one extreme, from the simple slash-and-burn cuts in services that we see from many other Tory councils, to the other extreme, which we have not seen in west London for 20 years, since the days of Shirley Porter, of gerrymandering and of social engineering. They are examples of exactly what the Conservative party says when it states, "This demonstrates how we will run the country." I welcome any hon. Member from any party to come to Hammersmith and see exactly how that would be done.
9.24 pm
James Brokenshire (Hornchurch) (Con): It is a pleasure to be able to take part in tonight's debate on local government funding. Several hon. Members have made clear the pressures that are placed on many local authorities in delivering value for their areas and ensuring that council tax increases are kept to the absolute minimum. That is why I support the policies that have been put forward by Conservative Members to try to ensure that there is a council tax freeze in relation to our own councils.
I want to deal with some general matters as regards funding for local authorities and, in particular, to localise the issue in relation to my own local authority-the London borough of Havering. There has been some debate about population data and methodology. I want to highlight the issue of the elderly populations contained within many local authority areas and the impact that that has on projections. That applies particularly to my area, which has the largest number of older residents of any London borough. In the years between now and 2023, we expect there to be an increase of some 9,300 in the number of people aged over 65, with a particularly marked rise in the number of those aged over 85. We need to think about what that will mean in terms of the pressures on social care and the ability of council budgets to cope with those demands.
Havering, as a nice leafy green borough, is seen as having lots of owner-occupied homes and historically low levels of unemployment, diversity and deprivation, although pockets of deprivation do exist. That apparent prosperity masks the increasing pressures of dealing with a settled and ageing population. Several residents live in mortgage-free homes-the asset-rich, cash-poor population-but their apparent comfort masks an increasing need for social care support. With an ageing population and dwindling resources, the pressures on services will grow, and there does not appear to be within the local government finance formula a proper recognition and acknowledgement of that issue and how it will increase in importance over time as the demand for social services and support services for the elderly continues to increase.
Talking about the pressures on local councils is not simply about the methodology arguments on how the funding is allocated, but about how the Government have changed their mind on certain key issues and the impact that that is having on local councils in dealing with it. We have had the discussion about how this is all about three-year funding settlements, which implies that councils should be given greater certainty and an ability to plan their budgets and to know what they can do for the benefit of their local residents. Yet two recent examples have thrown a very big spanner in the works for London councils, in particular, in being able to ensure that they can plan their budgets effectively.
The first example concerns the Government's change of approach on the decent homes standard. It was said that if an arm's length management organisation achieved two-star status, funding would flow through to it and the benefits would accrue to local residents, who would get the new windows, bathrooms and kitchens that many of them had been patiently waiting for. However, in Havering, when our ALMO, Homes in Havering, attained two-star status, that funding did not come with it because the Government had changed the rules and requirements and decided to reallocate the money under their Building Britain's Future programme. Our ALMO had been waiting patiently to deliver the important changes whereby local residents could see the significant improvements that they had been promised, but it got a slap in the face instead of the funding that it had been expecting. That means that Havering council, in seeking to meet those aspirations and demands, is having to try to identify funding in order to deliver sooner the benefits that were expected to accrue. It is having to deal with the problems imposed on it by being promised that money and then finding out that it had been reallocated even though the planning and budgeting had been done on the basis that it would be available.
Councillor Michael Armstrong of Havering council recently said
"we will fight tooth and nail to reverse the Government's U-turn and secure the funding we were promised. Homes in Havering has achieved the standard that the Government set and ministers must now honour their side of the deal."
I hope that the Minister will provide some assurance about what is happening to the decent homes money, because my residents in Havering were promised something that has now been taken away from them.
The second example is the change in funding for the freedom pass. London was set to receive about £58 million in 2010-11 and councils had planned on that basis, but we now discover that they have not got that money, and the Department for Transport consultation proposes that about £30 million should be clawed back.
Angela Watkinson (Upminster) (Con): My hon. Friend from my neighbouring constituency will know that the increase in cash for Havering council this year is about £750,000, but £500,000 of that will be used up on the extra costs of safeguarding children, and the council now has to find another £1 million to pay for the change in special grant for the freedom pass, which all our elderly residents value so highly.
James Brokenshire:
I agree entirely. I regard the freedom pass as extremely important for the over-60s, and the Government tinker with it at their peril. My hon. Friend
is right that Havering is having to find an extra £1 million, and we may hear from the hon. Member for Croydon, Central (Mr. Pelling) that Croydon has a black hole in its budget. I know that Bexley will have to find another £1 million as a consequence of the very late change that has taken place. It is all very well telling councils to find efficiency savings and plan on a certain basis, but if they suddenly have to find an extra £1 million from their coffers at the last moment, it places them in an extraordinarily difficult situation.
It is telling that we have been told tonight that there is a consultation taking place and the Government are consulting us on whether they should press ahead with the changes. I listened carefully to what the Secretary of State said, and it struck me that he had a closed mind, that no consultation is taking place and that the Government have decided that that funding will not now be put in place. They want councils to take the lead and the responsibility for their residents, but the Government have responsibilities as well. Saying to councils at the last moment, "We promised you the money, it's not there, you've got to deal with that now", hardly makes it easy for councils to ensure that they deliver the value for money and council tax freezes that we want. The Government are reneging on the deal at the last minute and placing those councils in that extremely difficult situation.
9.32 pm
Mr. Andrew Pelling (Croydon, Central) (Ind): We had a fairly acerbic start to the debate, with discussions about exchanges of correspondence or otherwise, which I felt was beneath the dignity of such a good Cabinet Minister as the Secretary of State. I would prefer to emphasise the importance of Front Benchers regarding themselves as accountable to the whole House, not to each other.
I start with some thanks, first to Her Majesty's Opposition for securing the debate so that we have the opportunity to represent our constituents' concerns, as the hon. Member for Hornchurch (James Brokenshire) said. I also thank the Government for the significant support that they have given Croydon in capital spending, promises of extra spending on schools, local enterprise growth initiative money and funding for extra social housing. I particularly wish to mention Councillor Dudley Mead of Croydon council, who takes a positive view of the importance of providing extra social housing, working in conjunction with the Greater London authority and the Government. I thank the Government also for the letter that I recently received about the money to support town centres that has come to Croydon, although the £50,000 provided may well be too little, bearing in mind that just in George street 17 properties are out to let.
The hon. Member for Bromley and Chislehurst (Robert Neill) was challenged on the relative bandings of the properties in his constituency and how highly they are rated. The key question would have been how much residents in south London pay in council tax. In many ways, the existence of London government inevitably means that a great deal of money is transferred away from south London to other priorities in both central and east London. There is very great deal of concern within the Croydon business community that the supplementary rate that was previously passed will mean
that money will be taken away from businesses at a difficult time to support major schemes elsewhere in the capital.
I apologise for wanting to put Croydon first in this debate, but I should like to draw some issues to the attention of those on both Front Benches in looking forward to what will happen in next year's review of local government expenditure, which will perhaps cover a three-year period. The London borough of Croydon has long suffered from how the area cost adjustment is calculated within London. Croydon is regarded as an east London authority, whereas neighbouring areas such as Sutton are regarded as being in west London, where costs are presumed to be higher. That is not entirely logical. When Croydon works on a strategic partnership basis on contracts with, say, Lambeth, it will pay the same rate for work done on its highways, but it will nevertheless be rewarded, in terms of grant, at a lower rate than Lambeth.
Croydon is facing particular challenges because of the number of individuals who, because of their migration status, have no recourse to public funds. The local authority quite rightly estimates that that costs £2.5 million a year, and that a further £2.5 million will fall upon council tax payers as a result of the closure of the walk-in asylum centre in Liverpool and the transfer of some of those applicants to Croydon. I warn the Government that that is very unpopular with the residents of Croydon. When the Home Secretary came to his home town to speak to the local Labour party, he was interviewed by the Croydon Advertiser and said that no money would be provided in compensation. That had a very deleterious effect on support for the Labour party in Croydon.
The hon. Member for Hornchurch mentioned the important matter of the freedom pass. The cost in his borough will be £1 million, but in Croydon the cost will be £1.5 million. I am sure we are all determined to ensure that such financial issues do not stop us defending the provision of the freedom pass within London.
It is not as though Croydon has been slow in trying to be efficient. Sixty million pounds of efficiency savings have been found in recent years. The local council outperforms the 4 per cent. target for efficiency savings that the Government expect and seeks savings of 5 per cent., partly by working through strategic partnerships. However, with further legislation such as the Personal Care at Home Bill before the House, the reality is that the council will struggle to find such efficiency savings. It may well be difficult for Croydon to deal with the prospect of the introduction of a cap at 3 per cent. Unlike London Labour authorities, Croydon has been unable to match those zero per cent. approaches towards setting budgets. Indeed, it has been disappointing that it has had to set increases at 4 per cent. a year.
There are ways in which Croydon can make savings. It is more difficult to make the case for Croydon when a very significant loan of £145 million has been secured to build a new town hall. That cannot be a priority when the town has other important and pressing needs. I would have thought it better for Croydon to consider becoming a tenant in a development at east Croydon, on the Croydon Gateway site. That approach would have a multiplier effect in terms of getting that development going and giving others the confidence to invest in Croydon's property market. It also needs to be borne in
mind that councillors receive £6 million in allowances over the four-year period that they are in office. Some transfer of that money to improve policing, for example, would be more effective.
Finally, please remember that Croydon is facing dynamic population change, partly because we are the headquarters for the migration service in this country. Please also remember that many of the jobs that Croydon people enjoyed were in the City, and not necessarily at the high rates of pay talked about in the media. Croydon is dependent on public sector jobs-29 per cent. of our jobs are in the public sector. The prospect of jobs being transferred outside the south-east could prove a particular challenge for Croydon and increase the need for effective local government financial support in the future.
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