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Even in the year when it was thrown out of office, the Labour council increased council tax by 4.1%, and its performance was rated as weak and some way behind that of comparable councils. Three years later, the situation is somewhat better. The council is now rated adequate and is improving year on year. This has not been achieved by the Labour methods of tax and spend. As Winston Churchill said, for any society to believe
that it can tax itself to prosperity is as ridiculous as a man standing in a bucket and believing he can lift himself up by pulling on the handle. The Conservative-controlled district council has introduced below-inflation increases of 2% in 2008 and 2009, and this year has introduced the sort of increase that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) would doubtless describe as "a 0% increase". Much to the relief of local residents, the council is improving services through prudent financial management and by trimming away the fat of previous administrations.
The east midlands and Leicestershire have fared little better under Labour on other essential public services. On policing, based on the 2009-10 budget and the 2008-09 crime survey, the east midlands region has the lowest grant relative to the number of crimes in the whole of the UK. The east midlands receives just £1,330 in grant for every crime, whereas the north-east region receives an extra £800 per crime to deal with the offences in its region. Let us consider what happens with other essential services. The combined fire service of Leicester, Leicestershire and Rutland is the lowest funded per capita of any shire county fire service in England. Those and many other inequalities must be borne in mind when funding decisions are made.
I must reiterate that the fat, bloated local authorities are the ones that need to put their house in order when it comes to the inevitable cuts, which must be made this year, next year and for several years to come because of the awful financial legacy of the Labour Government. In conclusion, all I ask on local government financing is for a fair settlement for the east midlands, for Leicestershire and for my constituency of North West Leicestershire.
7.51 pm
Chris Leslie (Nottingham East) (Lab/Co-op): Members on the Benches opposite are, understandably, repeating this desperate mantra about "unavoidable cuts". I suppose they think that if they can cling to that enough and repeat it often, somehow it will become true. These announcements of reductions-these swingeing cutbacks of public services-are not unavoidable; there are alternative strategies. Taking out 25% of public spending in these unprotected departmental expenditure limits within such a short period of time-four years-is to act too quickly and too harshly. There is no consensus among economists-that is certainly the case globally, let alone in this country-that this approach is the only way to protect our triple A rating and is essential in order to avoid a Greek-style arrangement. I suspect that either there is a little naivety on the part of the Liberal Democrats in propping up this ideological zeal to reduce public spending, which has always been present in the right wing of the Conservative party, or the Liberal Democrats-at least some of them-have sold their souls in order take on the trappings of high office. I hope that is not the case, but I am sure it is beginning to look to many of my hon. Friends as though it might be.
In my constituency, in Nottingham, the first tranche of service cutbacks-taking out the £6 billion and having £1 billion of reductions in local government spending-meant £4.5 million taken out of Nottingham's front-line services. Some £2.7 million has been taken out of the education area-based grant-that money is not just for the one-to-one tuition that we were hoping to have for children in most need, but for the school
transport budget, the special educational needs budget and so on-and £1.2 million has been taken out of the working neighbourhoods fund. The title of that fund does not really capture what it does, because the fund helps to combat teenage pregnancy and ensures that welfare rights advice is given to people. It provided the money that went hand in hand with the future jobs fund to help to get young people off benefits and into work. Millions of pounds have been taken out of these services, with £350,000 being removed from road safety spending and £2 million from the transport capital grant.
Mr Mark Spencer (Sherwood) (Con) rose-
Chris Leslie: I know that will affect the constituency of the hon. Member for Sherwood (Mr Spencer), as it neighbours mine.
Mr Spencer: Does the hon. Gentleman agree that Nottingham city council might have been assisted if it had not had to dispose of three chief executives before their contracts expired, because they could not get on with the Labour-controlled city council, and pay them settlement fees in excess of six figures?
Chris Leslie: No, I would not agree. The tactic of the hon. Gentleman and of many hon. Members on the Benches opposite is to pick one or two anecdotal examples of problems, creating from those a whole story about how the public sector is rife with inefficiency and difficulties, and has to be culled. I presume he thinks that the only way forward is this fantastic private sector drive, which is always correct in all circumstances. There are examples of poor practice in the public sector, just as there are in the private sector. All I say to him is that taking 25% of public spending out of these vital services within four years will affect his party and the Liberal Democrats at the ballot box, particularly in the local elections next year; it will be interesting to see the reaction from the Liberal Democrats then.
We are all constrained by time in this debate, but I wish to raise a couple of points, especially on the local government finance particulars that have not been addressed so far. Some of my hon. Friends have mentioned the difficulties created by the in-year reductions in the first wave of announcements. Strangely, there will probably be four chops of the axe: the first announcement at the end of May/beginning of June; the Budget; the spending review coming up in the autumn; and another Budget in March. One consequence is that the ability for any sensible local authority to plan ahead carefully, cautiously and sensibly on a medium to long-term framework containing some understanding of what settlements it might achieve, given that the vast bulk of local government money comes from grant, has gone entirely. No sane or sensible local authority will be able to make any decisions about how it proceeds for the medium term until it has heard what is in the spending review. The danger in making some of the reductions within this mid-year period is that the short-termism will create extra harm, because changes will not be thought through or evidence based, and unfortunately they will probably hit those in most need.
Another consequence of this short-termism is that it affects some of the carefully constructed partnerships between public agencies within localities, which we have all been hearing about. We all, of course, want Total Place and we want local authorities to work together, be it at local strategic partnership level or under the local
area agreement frameworks. Those partnerships have been shattered into smithereens because each public agency will retrench into its shell, with local authorities having to focus very much on their own situation and being unable to pool discretionary resources with other agencies. I am sure that the same will be the case in respect of police authorities, health bodies and others, and I very much regret that move.
The Government also decided to scrap the local area agreement reward grant. Again, this is a technical area, but the grant was important in process terms because it encouraged some sharing of objectives between central and local government. Not every front-line service is determined by a local authority alone. Of course, as we have heard, all sorts of services depend on central and local government working in tandem. Driving a coach and horses through the local area agreement framework will mean that local authorities will have absolutely no incentive to work in partnership with central Government, because in doing so all they have been given is a slap in the face. That is a great pity, because although this approach may not necessarily be noticed by our constituents, it is a crucial piece of the jigsaw that made a big difference.
The notion that the Government have been so generous in removing the ring-fencing from a series of grants after they took the axe to area-based grant that already exists is worrying. If the first thing that the Government decide to cut is that budget, which already contained a degree of flexibility and involved local authorities having an amount of freedom-local councils were getting used to working without the constraints of the centre-and straight away the front-line thing that goes is the area based grant and that flexible money, what will be the reaction of any local authority when the next tranche of money is magically un-ring-fenced? Naturally, those will be the next sums of money to go through the exit door, be they for the de-trunking of roads or for housing market renewal-the Government say they are removing some of the ring-fencing from that. Those will be the items of expenditure that will probably be cut next, because that is the signal that the Government are sending.
Gordon Birtwistle (Burnley) (LD): The housing market renewal grant was obviously spent on renewing areas. Does the hon. Gentleman think that spending 10% of the total money-more than £300 million-on mini-quangos that simply passported the money through was sensible? Last year, more than £33 million was spent on these quangos, which basically just passported the money through. That has now been running for four years. More than £130 million, which could have been paid direct to local authorities to deliver the programme, was sent through totally unnecessary quangos set up by the Labour Government.
Chris Leslie:
The hon. Gentleman can make these points, but they are dancing on the head of a pin. I think it is important that this money goes to the front line and gets spent, but it certainly will not help to cut these sums of money by a quarter-probably more than that-over four years. The hon. Gentleman seems to have these issues completely out of proportion. It is also interesting that in a written answer to me, the Under-Secretary of State for Communities and Local Government,
the hon. Member for Bromley and Chislehurst (Robert Neill), had to correct the announcement that the Government had made to the House about the un-ring-fencing of so much money. They discovered that a mistake had been made when they said that £300 million of private sector renewal moneys and the housing and planning delivery grant had been un-ring-fenced. It turned out that that money was already flexible, so their totals were changed entirely.
I want to talk about one or two other points that have not been mentioned much. Capital spending on infrastructure and on the improvement of the basic facilities in many of our constituencies is essential. Not only is capital grant being reduced significantly, but a little-spotted change was announced in the Budget in respect of prudential borrowing and the freedom that the previous Administration gave to local authorities so that they did not have to jump through all sorts of Treasury bureaucracy to be able to access capital loans from the Public Works Loans Board. An item in the small print in the Red Book now states that local authorities will have those requests from the PWLB scrutinised far more closely than before. In other words, it is a return to the days of centralism, if they get that money at all. Local authorities will have less capital grant as well as less ability to access PWLB money.
Does that mean that local authorities will have to go for bond finance, which is more expensive? I would certainly like to hear more from the Government about that; there was not an announcement in the Budget about bond finance. I would also like to hear where we stand in terms of accelerated development zones, tax increment financing and other measures that would be useful in encouraging innovation in the way in which local authorities access capital markets.
My final point concerns the choices that local authorities face and where they go with these difficult decisions. Many Government Members might have local authority members who are happy to take on the full burden of the reductions in the services that affect their constituents who are in most need. Many Labour authorities-and indeed, those run by the Liberal Democrats as they used to be-might want to try to temper that and to consider raising revenue from other sources. Traditionally, council tax has been the only option, although there is a quasi-capping arrangement going on with the supposed one-year council tax freeze deal. Most local authorities will probably be fairly daft not to accept the money that is on the table, although it is entirely unsustainable. There is no way that the Government will be able to extend that for long. After we have gone past this first year, we should be aware that the gearing ratio means that local council tax increases could easily be of the 10% to 15% variety. Does that mean that the Secretary of State will bring capping back in? Again, so much for his localism.
I suspect that the real burden will end up hidden away in the fees and charges that all our constituents have to pay, with a return to the easyJet council model-it will be hidden not just in planning charges, parking charges, swimming and library charges and so on but in those social care charges that hit the poorest most of all. Unfortunately, this is an ideological set of changes-
although I hope that the Liberal Democrats will think again-that are certainly not in the interests of any of our constituents.
8.4 pm
Mr Marcus Jones (Nuneaton) (Con): First, I congratulate my fellow west midlands colleagues, my hon. Friends the Members for Wolverhampton South West (Paul Uppal) and for Dudley South (Chris Kelly), on making excellent maiden speeches.
I have listened intently and with great interest to the debate. Opposition Members seem tireless in their criticisms of the measures that the coalition Government are having to make. I am afraid that the debate has been a little like a stuck record-technology that we were quite used to in the 1980s, and which they seem to hark back to. At that time, I remember that many small and medium-sized businesses occupied our industrial estates in my constituency. That was the case until the mid-1990s, but unfortunately after 13 years of Labour Government many of the industrial units that I remember that used to be full with people in employment now stand empty. I hope that the coalition Government will put that right by refreshing and rejuvenating the private sector.
Opposition Members make no apology for mortgaging our country to the hilt and they still seem to want to keep spending and spending. They talk about reducing the deficit, yet we still hear no tangible sign of how Labour would get us out of the black hole in the public finances that they spent many years putting us into.
Not only were the previous Government profligate with the public finances, but they were also profligate with their constant diktat to local government. Local councils have been subjected to the constant and never-ending grip of the previous Government, obsessed with performance management, inspections, ring-fencing and general micro-management.
Let me touch on the performance management regime operated by the previous Government. It spiralled completely out of control, with councils at times being asked to report on matters over which they had little or no influence and in which they certainly had no decision-making power. Under that regime, by 2008 a typical council was spending £2.6 million a year reporting performance information to central Government. That additional burden also cost front-line services. For example, essential services such as bin collections have been reduced. That has all happened in spite of the fact that council tax virtually doubled under the previous Government, not to mention the spiralling cost of fees and charges to the public-a practice that was actively encouraged under the previous Government, particularly by Lord Prescott, about whom we have heard quite a bit today.
The previous Government should have used the line "less for more", such was their contempt for local government and communities across the country. Reducing core services and doubling council tax is the legacy of 13 years of Labour Government. I need only look at my local council, Nuneaton and Bedworth-a council on which I was privileged to serve, and where I saw at first hand examples of how the heavy-handed clunking fist of the previous Government affected local government and the ability of local councillors to represent local people and make local decisions.
While it was under Labour control, the council was given a comprehensive performance assessment. Many Members who have been in local government will probably have enjoyed that experience. The Audit Commission gave the council a weak rating. On advice, the council responded by embarking on a two-year process of CPA voluntary engagement. That wasted thousands of hours of officer time, employed a number of additional consultants at a substantial cost to the authority and caused additional layers of bureaucracy that were added to the council's structure. What were the outcomes for local people? They were negligible and certainly not proportionate to the resources expended over several years.
I have no doubt that the comprehensive area assessment will be just as onerous, as my hon. Friend the Member for Rugby (Mark Pawsey) pointed out. I therefore welcome the decision made by my right hon. Friend the Secretary of State to abolish the CAA, which, I have no doubt, will reduce the inspection burden and free up vital resources to deliver services. My right hon. Friend has made an excellent start and my hope is that he will go further and work with the Local Government Association, which has suggested today how £4.5 billion of savings could be achieved through:
"Reducing the regulatory burden on councils and pruning out the maze of Quangos, middlemen, bureaucratic funding streams and audit arrangements in order to protect front line services on which the most vulnerable depend."
I also welcome the decision by the coalition Government to announce further removal of ring-fencing. The planning delivery grant is a prime example of how ring-fencing often fails, with councils often having almost to invent projects on which to justify spending grants. Again, my local authority was no exception when it was under Labour control. I recall it spending nearly £70,000 of planning delivery grant on audio equipment for the council chamber to improve the facilitation of council meetings. Until that point, and for some time thereafter, the council did not even hold planning meetings in the council chamber. When it did, the new audio system did little to add value to the planning process or to aid the expeditious construction of new property and houses in the area.
My experience tells me that councils will cope and adapt to the changes that the coalition Government are being forced to make. Many councils have already had to learn to work smarter in the past few years and are working with other authorities to deliver services in a smarter way. That can work especially well. My local authority has shared services such as payroll, IT, building control and procurement successfully with other local authorities. No doubt, councils up and down the country will be looking into putting shared arrangements in place. That is an extremely sensible and cost-effective move.
To conclude, I am glad that there appears to be such clear water between the Opposition side and the Government side. We acknowledge the tough times ahead, we are dealing with our debts head-on, we acknowledge that things will be difficult for local government in the next couple of years and we intend to allow councils to make their own decisions based on local need. We intend that local councillors will be freed from the central Government straitjacket that has strangled local government for so many years, so that they can do
what they think is right for local people. That approach is diametrically opposed to the stance of Opposition Members, who are burying their heads in the sand regarding the debt that they are responsible for. They also seem to want the Government to keep our councils in their pocket-to keep them in a straitjacket and dictate how and where they must spend their money regardless of priorities. The very motion that they have put forward this evening explains that.
I know which approach I would prefer if I were still a council leader. I also know, from my dealings with local government and from my contact with fellow Conservative, Labour and Liberal Democrat councillors, which they would prefer-more autonomy for local authorities, not less, and I am sure that this coalition Government will provide that. That is why I support the Government's amendment.
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