Mr Clive Betts
MP for Sheffield South East · Labour · United Kingdom
“I wholeheartedly welcome the Foreign Secretary’s statement, both its content and its tone. I would like to ask about his discussions with our colleagues and allies in other countries who are looking to implement similar sanctions.”
“I offer two congratulations: first, to my right hon. Friend and constituency neighbour, the First Secretary, on her well-deserved promotion—I am sure she will do an excellent job. Secondly, I congratulate her and the Prime Minister for their real commitment to devolution, which I have wanted to see for an awfully long time.”
“I apologise for the fact that—as I have explained to you, Madam Deputy Speaker—I will have to leave straight after my question to chair Westminster Hall. I thank my right hon. Friend for doing this very challenging piece of work. I think that the theme of fairness, for the people who need benefits and for taxpayers, is right.”
“On the other hand, so many constituents with really serious conditions get turned down for PIP, and can get it only if they struggle through the appeal system, sometimes without any help at all. So the system is not fair to anyone at present.”
“When the previous Government let the contract, we were in a situation in which procurement could not properly take account of the past record of companies, and I understand that the Government have now changed that.”
“I will dive very deeply into the question, Madam Deputy Speaker. The Chair of the Committee sends his apologies for his absence; he is presently in a Committee meeting.”
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“The Select Committee is currently conducting an inquiry into localism, and I do not want to pre-empt or prejudge its findings, but one thing that a number of witnesses have regularly asked is whether local authorities are at the heart of localism or whether they are bypassed by the Secretary of State going directly to communities and ignoring elected representatives. The answer is that the Government do not really know because there is a mixture of proposals that treat localism and local authorities in a totally different way. The Secretary of State was dismissive when he was challenged about the number of order-making powers, of which there are 140, but it is no answer to say that there were more in previous legislation.”
“It is always a pleasure to follow the hon. Member for Mole Valley (Sir Paul Beresford). He and I had some very interesting years together on the Select Committee on Communities and Local Government in the previous Parliament. Let me say to him in a friendly way that memory loss can be longer than 13 years and that compulsory competitive tendering was hardly the most decentralising policy that any Government have brought in. By instinct and philosophy I am a localist, so it gives me no great pleasure to say to the Secretary of State that the Bill is a missed opportunity. I simply do not see in the proposals a coherent philosophy telling us what localism is all about.”
“Is it at that point that the Secretary of State will intervene, or is it that they will accept the sum total of local will across the country and fall down on their national house-building targets and their renewables obligations? What is the Government’s position? I have not heard a coherent explanation of it.”
“With regard to the abolition of the regional spatial strategy and the development of neighbourhood plans, my concern is that change of this kind brings uncertainty and, to an extent, a lack of clarity, and that it could bring delays and, potentially, unintended consequences. What will happen ultimately? The Government say that their policy is to build more homes than we were before the recession. They have obligations on renewable energy and ensuring that wind farms are developed to meet them, but what will happen if the sum total of all those local decisions is that fewer homes are built and not enough wind turbines are built to meet our renewables obligations? What is their fall-back position?”
“There was a problem with the initial design of the board, but it was subsequently reformed and now works an awful lot better. My concern is that if a local authority chooses not to have one, there will be nothing between the action of pulling a local councillor up and questioning their actions in some way and taking criminal action against them for failing to deal properly with an issue in relation to which they have a registered interest. There could be a real problem there with a void in the system. I have other real concerns. The Government are embarking on a fundamental change to the planning system in this country, which Government Members cheered because that is what they believe in.”
“Rather than a referendum on whether local authorities should cut services, there can be only a one-way referendum if a Secretary of State thinks that a council tax increase might be excessive, as defined by him. Why can we not just leave it up to elected local representatives to make such decisions? I continually refused to vote for the previous Government’s proposals on capping council tax because I did not think that they were right either.”
“Ultimately, the test will be whether the policy works. My question is this: if the policy does not work, what is the Government’s fall-back position? The Bill includes a duty on local authorities to co-operate on a range of issues, and it is important that they do so, because many of those decisions will have an impact beyond the boundaries of an individual authority. What will happen if local authorities do not co-operate? The Bill is vague about what will happen in that case. I have mentioned that local authorities stand at the heart of localism. I believe in elective, representative democracy, so I do not understand why it is necessary for the Bill to spell out what the Secretary of State thinks is a proper increase in council tax and for there to be the power to have a referendum in such cases.”
“There is no coherent philosophy. It is very unclear whether local councils are at the heart of the process or whether it is the Secretary of State, bypassing local councils on a range of measures and imposing the way localism operates locally, which is wholly contrary to the meaning of the word.”
“I believe that they have a place, but if the proposals on flexible tenure are put together with the 50% cut in funding for social housing—that is the Government’s policy—the only social houses that will be built, after those that the previous Government committed to, will be those built on flexible tenure at rents related to market rent levels. The Government are thereby effectively ending the provision of any new social housing as we know it in this country, and I cannot agree with that. By all means let us have additional forms of tenure, but not at the expense of removing altogether the existing forms of social housing tenure for new build. I know that other Members wish to speak, so I will conclude. I regret that the Bill does not really deliver on a holistic localism agenda. It is a missed opportunity.”
“I will not give way again, because many other Members wish to speak. As for local democracy and decisions being taken at local level, why is it necessary for the Secretary of State to take a raft of powers relating to shadow elected mayors? Why can we not leave it to local people or councils to hold a referendum so that local communities can decide whether they want an elected mayor? Why must the Secretary of State take powers to bring in shadow elected mayors? The proposals do not seem very localist or democratic. On the reform of council housing, I am not against different forms of tenure.”
“The central Department’s spending will go down by 68% in real terms over the four-year period. The Government are saying that that is all right because many of the functions that the Department carries out will be passed down to local authorities—the brand of localism is at the heart of what they are saying. On the other hand, the Localism Bill, which will come to the Floor of the House on Monday, includes a great deal of work for the Department at the centre to do. It provides some 150 order-making powers that Ministers and civil servants will be involved in administering. I have concerns about the effectiveness of future work in the Department, given the scale of the cuts.”
“All those, of course, have an impact on local government: they increase the demand for local government services and increase the need to spend money at local government level and to switch it away from other important and essential services that local government carries out. I shall say no more about that. Yes, all right, the Government have embarked on a significant deficit reduction programme which means, in effect, cuts to public expenditure. The average cut among Whitehall Departments will be 19% over the four years. I shall raise several matters which I hope the Minister can come back on. The first is that we have not had an explanation as to why the Department for Communities and Local Government seems to have been ready to offer itself up for the largest cut of all.”
“I do not want to get bogged down in the Government’s overall policy on deficit reduction. The Secretary of State mentioned it in the evidence session, and said that everything had to be seen in that context, which was a fair point to make. I might make a different point about the depth of the attempts at deficit reduction and the speed at which the Government are going about it, but that is not our job here today; it is to look at the impact on local government and local services. Nevertheless, it has to be said that if the impact of the scale and speed of deficit reduction is that the economy stalls and unemployment rises, it could lead to increased repossessions, increased rent arrears, pressure on housing services and housing and benefits advice, increased social tensions in communities, and an increase in crime.”
“Other members of the Select Committee, particularly from the Labour side, wished to be here, but I am sure we are all aware that two of them have constituencies adjacent to one where a by-election is taking place today. I do not know whether the rumours are true, but perhaps the major Government party has not been quite as enthusiastic about fighting the by-election as some other parties have been. I thought for an awful minute that the Minister might be late. I thought that he might have been detained in last-minute urgent discussions with the Treasury, and that he would come here and announce a little bit of improvement on the settlement. We would have had even more to discuss in terms of helping local government through what will be a difficult period.”
“It is a pleasure to serve under your chairmanship, Mr Robertson. I am introducing the debate as the Chairman of the Communities and Local Government Committee, and I shall draw heavily on the evidence session that the Select Committee had with the Secretary of State; the Minister of State, the right hon. Member for Tunbridge Wells (Greg Clark); and the Minister for Housing and Local Government on 21 December 2010. I shall try to do so objectively, and I am sure that other members of the Select Committee who are here will do the same. However, we all have to wear our political hats as well, so my interpretation might be slightly different from that of some of my colleagues.”
“That is still a big figure. It might be helpful to take this a stage further. Perhaps we could have at some point a note from Ministers to identify precisely where the difference between the 33% and the 68% actually goes in being passed down, because local authorities have not been claiming that they are seeing the benefit of an extra 35% in their budgets.”
“Pass it on to local government: it will deal with the difficult job and someone else might be blamed.”
“I agree with that. I believe there are statistics to prove it, although other Members might come to a different conclusion when looking at the same statistics. We had a discussion with Ministers about that in our evidence session. I shall come on to that specific point, which is an important one. Moving on from the spending for the Department at the centre to local government budgets, there will be a 28% reduction in Government grant over the four-year period. I believe that that figure is agreed; I do not think that anyone denies it. Why is local government taking a hit that is much larger than the average reduction in Government spending as a whole? There is a slight feeling that it is because it is easier to give the problem to someone else to deal with rather than dealing with it oneself.”
“They are about essential provision for daily life from which everyone benefits, whether it be refuse collection, street cleaning, highway maintenance, street lights—the kinds of things that everyone benefits from in terms of the taxes that they pay and the services that they get. Why put those immediate services for most of our constituents at more risk than the average in terms of cuts of Government spending as a whole? The Government must answer that question.”
“Why is that happening, particularly when local government has a good track record in making efficiency savings? If one looks at government as a whole, it was local government that led the way, even under the previous Government: 2% year-on-year efficiency savings were built into its budgets. If one looks at the impact of government services as a whole, the services that are provided by local government are some of the most immediate to our constituents. They include services to the disadvantaged and those in need: social services care provision, aids and adaptations. They are about the quality of life: things such as parks, libraries and sports centres.”
“I said at the beginning that I do not want to get into a long debate about the overall nature of deficit reduction, apart from saying that the Labour party has a different view about the scale—reducing the deficit by half, not totally eliminating it, over the four-year period—and the pace, which would not have been as great. We would not have started the cuts in this financial year, before the economy had properly started growing. There are differences. However, I come back to the point that, whatever the average level of cuts across Government, there still has to be a justification as to why spending on local government—the money passed on by central Government to local government—is taking a hit that is much bigger than the average for all Departments.”
“The figures that came out of the Library from the Scrutiny Unit show that the 10% most deprived single unitary authorities lost 8.4% of spending power and the least deprived 10% lost 2.2%. That is a significant difference. We have had a discussion about the Scrutiny Unit’s figures, and those figures clearly show a correlation between authority deprivation levels and how much spending would be cut. I do not think it is fair, but I accept, to a degree, that it is more difficult to protect authorities that have large grants because they are deprived, when grant cuts happen. I accept that the Government have done something, at least at the beginning of the process, with the £85 million transitional money to mitigate the problem, but whether that money will be available later in the spending round remains to be seen.”
“The Secretary of State obviously tries to get the figures down in his announcements, and I happen to agree that looking at spending power rather than at simply grant allocation is the proper approach. We still should look at the grant that central Government give as opposed to what they are doing to cut spending elsewhere in central Government, but it does matter in the end how much local authorities have to spend. When we look at the figures, however, we see a difference between the 8.9% maximum reduction in spending power that any authority has to face and the 0.1% increase that Dorset has managed to receive. As my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) mentioned, there is a significant difference in the level of cuts and the reductions in spending power between the most and least deprived authorities.”
“She could not understand why, if local government had to make necessary redundancies and wanted to capitalise that cost further, it would be penalised by the Government’s reducing the revenue grant. It would be helpful to have some comments from the Minister, bearing in mind the LGA’s response. There is a very big issue here of the speed of the cuts and their front-loading, and the effect of that on local authorities’ ability to digest the cuts into their systems and make sense out of them, as opposed to having to salami-slice at least an element of the cuts and having to pay quite a bit of money out for redundancy costs that would otherwise not have been necessary. I shall now respond to the Minister’s point about how the announcement was phrased.”
“Even if the figure is somewhere in between, local authorities will struggle if redundancy costs are of that scale, because getting rid of people in the first year might not make savings and might actually become a cost. The offer that I think the Secretary of State made, that if he had to provide another £1 billion of capitalisation he would cut the revenue grant by a further £600 million, does not seem to be the best offer that local government has ever had from central Government on such matters. Indeed, I think the rather angry response to the evidence that the Committee received from Baroness Eaton on behalf of the LGA has been circulated. In it she states that her recollection of the discussions with the Secretary of State on capitalisation was slightly different to that of which he had informed the Select Committee.”
“The front-loading will also mean that authorities have less chance to use natural wastage to save money, and will be forced, to a greater extent, into making compulsory redundancies, which are expensive; the money used to pay people to leave and to enable cuts to be made, could have been used to provide service delivery. We know there is an argument there. In the evidence session, the Secretary of State said he thought that the LGA figure of 140,000 job losses in the next year was wrong, but we never quite got from him what the right figure was. Nevertheless, there will be significant job losses. The Government believe that £200 million of capitalisation will be sufficient to cover redundancy costs; the LGA says £2 billion.”
“Local authorities, not just the councillors but the officials, say that the immediacy of the actions they have to take means that decisions will be less well made and there will almost certainly be less opportunity for the transformation of service delivery, which we all agree can make savings without the need for service cuts. It also means that local authorities will be pushed back into the salami-slicing approach, which Ministers say they do not want. I am not making a party political point. Authorities of all political persuasions—Conservative, Liberal Democrat and Labour councillors in the Local Government Association—will all say the same thing: that the pressure of front-loading will lead to a less effective and less efficient use of the available resources.”
“I accept what the Minister says about the different ways in which figures have been presented, and I shall come to that in a second. I am not going to complain about or disagree with how that was done, because it is important to look at spending power, but I come back to the point that I made. If central Government are looking to cut their spending, why have they cut the resources that they pass on to local government by more than the average cut in central Government spending as a whole? That seems a reasonable question, irrespective of the issue of local authorities’ spending power. The second issue is: why have spending reductions been so front-loaded? Local government has rightly complained about that. There is no doubt at all that there is front-loading: of the 28%, 10% is in the first year and 8% in the second.”
“I accept that the Government have decided to abolish the fund and to incorporate it into the revenue support grant. Fundamentally, this is a matter of principle: as long as a fair settlement can be obtained through the RSG, I am not against the initiative. Over the past few years, there has been a move—under the previous Government and now under this one—to reduce, and hopefully eventually to abolish, ring-fencing and I am generally supportive of that as a principle. With the proviso that the allocation is fair, it should be up to local councils, once the allocation is given to them, to determine how to spend the money in their areas. There will be certain statutory requirements, but essentially, as a move away from ring-fencing and towards a more open method of allocation, I am supportive of this.”
“I do not agree. We can always have discussions and disagreements about the extent to which grant allocations are fair, and I do not think there has ever been a grant allocation about which some Member has not stood up in the Chamber and complained, saying that their area gets a raw deal. That will always be the case, no matter where we get to. What tended to happen during the spending settlements of the Labour Government was that it was Conservative Members from the leafy shires who tended to get up and complain that they were getting a raw deal and that Labour was doing too much to help deprived areas. That was the general theme of discussions. I think that funds such as the working neighbourhoods fund were, in the end, both reasonably targeted to help some areas of deprivation and reasonably effective.”
“We were told that there was no need for other cuts in front-line services, and that, if local authorities shared their chief executives and a few back-room functions and HR and planning departments merged, that would be sufficient to provide savings in all authorities. That is not true, is it? No one in the Chamber believes that sharing chief executives, HR departments and planning departments will mean no need for cuts in front-line services.”
“Members here have been talking to their local authorities, but I do not know anyone who has been assured by their council leader that there is no need for cuts in front-line services. This is not a party political point. All parties in the LGA will say the same. I accept that there has been an extra £1 billion for social services provision, but we all know that there are democratic pressures, particularly if we are trying to keep people out of hospital with aids, adaptations and care packages. That may not even take care of the demographic pressures. The Secretary of State has said that the Supporting People programme need not be cut, but the next day Westminster council announced a £1 million reduction in its programme.”
“I would like local authorities to be given the power to set the business rate. I do not believe that that is the Government’s intention, but it has been my long-term view. At a time when total Government money for local authorities is shrinking rapidly, if business rates are all they have left to give back, but there is no money because it will stay with the local authority that collects it, where is the element of redistribution of Government funding? The cavalry is behind the Minister, and I hope that he will be able to give us an answer. I do not know whether the Minister will defend this, but can anyone seriously say that there will be no need for cuts in front-line local government services? I am sure that all hon.”
“The Secretary of State said that there were likely to be changes before 2013. There is a review of local government finance, and I understand that the Government’s intention is that business rates collected in an area should be retained there. How will there be an element of redistribution in grant to areas that are deprived and do not have a large business rate base if the total amount of money that central Government give to local councils is no more than the business rates collected, but the business rates will remain with local authorities? How can we achieve any element of redistribution to reflect differences in needs and resources if that is the Government’s intention? This is a really big issue, which Ministers will have to address at some stage. I do not demur from the Government’s objective to relocalise business rates.”
“I return to the point that local government was asked to find 2% efficiency savings year on year, and it has achieved that. Local government as a whole is now a much more efficient organisation than 13 years ago. A fundamental point about which the Minister may want to say something and on which the Committee challenged Ministers is the amount of business rates and the return of business rates to local authorities, and the fact that by 2012-13—the Secretary of State fundamentally confirmed this—the amount going to local authorities will be less than the business rates coming to central Government. There is a legal requirement on the Government to return all collected business rates to local councils. That will happen this year, but clearly it will not happen in future if the figures—they are notional at this stage—are confirmed.”
“The element of transitional funding that would have been needed to mitigate that unfairness would have been a lot bigger than the £85 million that was finally agreed with the Treasury. That is one of the fundamental problems of the front-loading of the cuts and their scale. I shall make another party political point—they are difficult to resist—but we must put the issue in context. The Minister may use this against me and say that local government has had a lot of money over the years, and that rowing back should not be too difficult. But the increase in total grants, including police and schools grants, and excluding business rates, that central Government provided to local councils from 1997 to 2010-11 was 80% in real terms, which is a very big increase.”
“The certainty is that people in Sheffield will think that that is profoundly unfair. I cannot resist making a party political point here: they will tend to wonder why a party controlled by the junior member of the coalition has not fought harder for the resources of northern cities such as Sheffield. I was perhaps tempting a response, but I am not going to get one. I am sure that issue will stay around. I return to the point that one of the problems that the Government have in trying to make the settlement fairer than it is—I do not believe that it is fair—is that the speed of the cuts and their front-loading makes it that much harder to make any sense out of them.”
“I do not want to give the impression that I am against local authorities deciding to share services in the right situation. My instinct is that an authority such as Sheffield probably needs its own chief executive, but perhaps some smaller authorities could reasonably share. Authorities such as Sheffield, which has very good departments—for example, our planning department —could offer services to other authorities. There is capacity for that. My point was whether such savings would be sufficient to deliver all the necessary spending reductions with no cuts in front-line services. That is not the message that I am getting from local councils of all persuasions throughout the country.”
“Somerset will close 20 of its 34 libraries, and Croydon will close five. Those councils, which are not of a Labour persuasion, are all making cuts in front-line services. Is the view of the coalition—both parties in it—that all those cuts are unnecessary, and that those councils are maliciously ruining services for constituents and residents when they need not be cut?”
“It is right to protect concessionary bus fares for pensioners, but there will be a squeeze on funding for integrated transport authorities in metropolitan areas. For example, subsidies for evening and weekend services, rural services and young persons’ concessions will be hit, and that will then hit people who are more deprived and do not have a car, and who are younger or older and rely on local bus services. The services affected will be those that deliver quality of life—parks, libraries and sports centres. The Secretary of State said that there was no need for cuts in front-line services, but Doncaster, which has an independent mayor and Labour councillors, will close 14 of its 26 libraries. I understand that Gloucestershire will close 11 libraries and have seven open for only three hours a week.”
“The only problem with that is that the post of PCT head will go shortly, so that saving will probably disappear. The issue is interesting. I would have liked to be much more radical and bring the functions of the PCT generally within the orbit of local authorities. One or two Conservative councils—I think Essex is one—were up for that. There could have been some more radical changes to make savings. Local authorities know that they have areas of statutory responsibility in social services and will try to protect those as well as they can. They also know that if reductions are made—this is becoming clear throughout the country—standards of street cleaning will deteriorate, as well as highway maintenance, for which there will be a 19% cut in capital funding.”
“I have already said that I generally agree that councils should have greater freedom to make choices about spending decisions. In general terms, I welcome the power of general competence to give local authorities even more discretion. Having greater ability to spend but their resources cut is the ironic position in which most of them will find themselves.”
“However, the Housing Minister has said that such a move would take place only in certain circumstances, and there is no general presumption that the Government would open the settlement without a reason. I am concerned that the Government want to impose greater controls on local authorities’ ability to borrow for housing purposes—that goes against the idea of localism. Are not the prudential rules sufficient? Why do further controls need to be brought in as part of the reform? That does not seem to run with the grain of localism promoted by the Government.”
“That was a helpful comment, and I hope that we will see good examples of councils coming forward, and that Ministers will respond positively. Finally, I would like to look at housing. I welcome the Government’s assertion that they will carry forward reforms to the housing revenue account. That places powers and responsibilities at local level, which is a helpful and welcome move. Local authorities will be disappointed—as am I—that they will not be allowed to keep all the receipts from any right-to-buy schemes, as they could under the previous proposal. I am concerned that the Government have the powers to reopen that settlement at any time.”
“It could take money out of local authorities and separate it from the system. I support allowing local authorities more control over general Government spending in their area—the “total place” approach. I am a little disappointed in the Committee budgets; they are narrowly focused and down to 16 authorities, and that point was made in the Communities and Local Government Committee. However, I welcome the comments made by the Minister of State, when he said that the Government would listen to proposals from local councils if they came forward with wider or more innovative ideas about how Government spending could be better dealt with, so that councils could take the lead as accountable democratic bodies.”
“I have given the overall figures, and I accept that some areas have done slightly better than others, but all authorities throughout the country had real-terms increases under the Labour Government. I challenge anyone to come back with an authority that did not have a real-terms increase in its spending. Generally, I support that, and I will not defend everything that the Labour Government did. Ring-fencing should be reduced, and I did not agree with separation of the schools grant. The Government have not been willing to challenge that, or give school grant funding back to local councils. If we believe in the freedom for people to spend and choose priorities at local level, perhaps that should have been done. Equally, I am not terribly happy about the free schools policy.”
“From the figures provided by the Minister, I calculate that the amount of money for decent homes over the next four years will be just over £1 billion, and the backlog of work still outstanding is around £4 billion. Therefore, it will be about 10 years—probably longer—before all council homes in the country are brought up to a decent standard. That is an awfully long time for people to wait.”
“Nevertheless, spending will be halved and after the existing commitments to build houses at current rent levels are met, there will be no central Government funding for houses other than those with rents that are linked to market rents—that does not necessarily mean 80% of market rent, but means rents that are linked to the market in some form. Those higher rents will help provide money to build new homes in the future. However, 150,000 new homes will not deal with the waiting list, and of those, any new starts will not have rent levels that many people can afford. That is the real problem. The decent homes funding is also going to be cut.”
“The reserves may help during the first year, but they are not a permanent solution to the cuts. We know that capital spending on housing will be cut by half in the spending round. We have not been building enough social housing—or enough housing as a whole—in this country, and we can argue on another day about whether the proposals for the new homes bonus and the planning changes will help or hinder that. The Communities and Local Government Committee will produce a report on that issue in due course.”
“It is a difficult issue. The Minister will say, “Look at all the reserves in local government. They can help mitigate the cuts to services.” They can, but reserves run out; they are spent once and cannot be spent again. During ongoing reductions in spending, reserves can help a council through a problem, but they will not permanently deal with it. Furthermore, reserves are not equally distributed and often they are found in authorities that have made housing stock transfers and have a big dollop of money from that. Some of the reserves cited come from schools and are held at the centre by local authorities, some are housing revenue account reserves with a specific use, and some are needed for the cash-flow issues that councils face on a day-to-day basis.”