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Deprivation (Edmonton)

Volume 477: debated on Thursday 12 June 2008

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Michael Foster.]

I was hoping that the previous debate might end a little early and give me more time, so I shall need to speed along to try to get to all the points I want to raise.

This debate is about the level of deprivation in Edmonton, and I seek to show that deprivation and worklessness are increasing rapidly in the London borough of Enfield, in which my constituency is situated. Of course, the borough does not adequately reflect the intensity of the real difficulty faced in my constituency. There is enormous disparity in the London borough of Enfield and my area is the one that has the most intense deprivation. I also seek to show that future employment opportunities in north London are in steep decline, causing some concern locally. Public funding to address the issues of deprivation and worklessness is being either withdrawn or cut. As a result of that, I want to ask the Minister what he can do to support my constituents.

Let me start with some limited good news. The local government settlement for Enfield meant that we received the third highest formula grant in London. We should have received 9.5 per cent. but received only 4.5 per cent. It was reduced because we had to ensure that the 29 London boroughs that had lost out in the process received the minimum floor of the formula grant. When I requested an explanation of the settlement from my local authority, it said:

“Enfield’s formula grant increased by so much largely due to increases in certain indicators that feed through to formula totals including unemployment-related benefit claimants…and Incapacity Benefit…claimants”.

Let me give some examples. The number of claimants of income support has shot up in my constituency and the London borough of Enfield. From 2001 to 2006, Enfield had the highest increase in the country—13.7 per cent.—at a time when the national figures were decreasing by 6.5 per cent. Enfield is the 17th highest area in terms of incapacity benefit claimants and second highest in the country in terms of lone parents. Worklessness has increased, rising by more than 17 per cent. in 2006. There is also what we call the London effect, which was defined in a 2006 Treasury paper entitled “London Employment”. The paper stated that

“some national policy responses to unemployment and economic inactivity can be less effective in London. Policies intended to raise the financial gain to work can be less effective in London because housing costs and costs of working can be higher”.

According to a recent study, my local residents have the 25th smallest incomes in the country, and the fourth smallest pay packets in London. Incomes locally are very low, but the conditions in my local authority of Enfield do not tell the whole story. There are huge disparities across the borough, as I shall show. The gross median wage is £385 in Edmonton, £446 in the more affluent areas, and £495 in the most affluent part. Similarly, unemployment in January totalled 5.8 per cent. in Edmonton, 3.9 per cent. in the more affluent areas and as low as 2.6 per cent. in the most affluent part of the borough. Enfield is not alone in having such great disparities, and that is especially true in London, but the people who work out the levels of need must recognise that there are real differences between London boroughs when it comes to deprivation and worklessness.

I turn now to employment opportunities in the future. In 2006, a seminal study entitled “Employment Projections in Outer London” was carried out by the London School of Economics. It concluded that only 10 per cent. of the growth in employment in London to 2016 would be in outer London, and that there would be nil growth in employment in both Enfield and in parts of south London.

The reasons are complex, but there are structural weaknesses in the Enfield economy. We are more dependent on jobs in industry and public services, and those sectors are the least likely to grow in the years to 2016. We are also sandwiched between the dynamic inner part of London, where there will be significant job growth, and the competitive home countries that will also do well in the given period.

The London borough of Enfield is also likely to have significant population growth over the next 15 years. When those two facts are put together, the implication is that there will be more commuters who live locally but work in either central London or the home counties, and that will place capacity constraints on public transport. The major growth in central London will be in jobs in finance and business services, but they do not suit everyone. They especially do not suit people with lower skill levels, of whom there are many in my constituency.

The LSE report suggested that greater focus should be placed on the London development plan, which has four development corridors. The one in north London runs through Cambridge and Peterborough, and the study very strongly recommended that there needed to be more funding for that development activity.

I turn next to the resources that we should be able to deploy to address some of the local weaknesses that I have outlined. European structural funding includes the social fund and the regional development fund. Until 2006 Enfield had objective 2 status, but the shift of resources to the east of Europe meant that there had to be a significant reduction in structural funding. There was an option to replace that with national funding, but it was not taken up.

The Government’s national strategic reference framework removed objective 2 status for north London, and as a result we lost a series of large project funds. We also lost the funding available through the grants to objective 2 areas. Subsequently, we have discovered that only €182 million will be available for European regional development funding in the whole of London over the next six years, and that is not enough to cope with the difficulties that we face.

There used to be a very comprehensive programme of other London development area funding, but it was replaced recently by what is called “spatial targeting”. The implications are not clear yet, but we know already that there will be no “as of right” awards for the regeneration opportunities in my constituency. As a result, there will not be enough funding for my area.

When we consider London Development Agency support for the Olympics, we see that resources meant for other parts of London, including my area, have been sucked into providing the site assembly costs and other costs related to development for the Olympics. It is clearly an incredibly important project for the country, but it should not be at the expense of local funding. We should have been receiving something in the region of £30 million for the upper Lee valley in my area, yet so far we have received only £6 million, which is well short of what was expected.

It seems strange that when London has the highest rate of child poverty in the country and the lowest employment rate, we shall across London receive so little assistance from the working neighbourhoods fund. Indeed, Enfield, which was a neighbourhood renewal funding area, will now become a transitional authority and the resources that would have been available will be phased out over the next few years, yet six local authorities that will receive working neighbourhood funding have a lower claimant rate than the London borough of Enfield. Twelve local authorities that will receive working neighbourhood funding have a higher employment rate, so it seems somewhat perverse, given the intense difficulties in my area, that such funding will not be available to it.

We are told that the intention is that the money should address entrenched pockets of worklessness where we have not been successful in the past. However, when we consider the cost of making unemployed local residents job-ready, we discover that it can be extremely high. A recent London Development Agency study on tackling worklessness suggested that the cost of preparing people for employment and sustaining them in it could range from anything between £5,000 and £30,000 over a significant period. That seems very expensive to achieve the aims of the working neighbourhoods fund.

Work in the area is being done at local authority level, yet in respect of other economic development spending, such as the economic growth initiative and the multiple area agreements, it has been suggested that to achieve the greatest benefit we need to work at a level higher than that of the local authority. Local authorities need to come together, but there seems to be a contradiction between that and the operation of working neighbourhood funding. Surely we need to try to achieve the maximum impact both on worklessness and in trying to improve prosperity.

Finally, I deal with local area agreements, which were set up to complement neighbourhood renewal funding and to narrow the gap between the most deprived parts of a local area and the rest. Among the objectives agreed by central Government, local government and local strategic partnerships were to set targets that would stretch performance locally. It was agreed that we would try to join up public services and, most important in this context, to allow

“greater flexibility for local solutions to local circumstances”.

However, in the London context problems are not always local. The enormous churn and movement across London boroughs can mean that many of the problems in my area and in Enfield are related to difficulties in surrounding boroughs, or even boroughs in other parts of London. Often, with regard to worklessness, which is the focus of much of the activity, the challenge cannot be dealt with only at local level: we need more than just local resources if we are to deal with the problems. I could go into detail about some of the intense worklessness in my area.

A recent report produced by Enfield strategic partnership, entitled “Building Futures—Changing Lives”, indicated that according to the Government’s research the London borough of Enfield had moved from 104th to 70th in the most deprived list over the past four years. In the past three years, there have been 6 per cent. more children in families living on benefits. In one of the wards in my constituency, 29 per cent. of people are workless. In one of the super-output areas—a much smaller, localised area—the figure is up to 36 per cent. How will we deal with that intensity of difficulty?

Deprivation and worklessness are increasing rapidly, and that may get even worse now that the economic cycle is in a downturn. Neighbourhood renewal funding locally is coming to an end. No European Union structural funds, working neighbourhood funds or local economic growth initiative funds are available. We do not have the apparatus to deal with the problems that face us.

I have tried to leave the Minister plenty of time to respond to this debate. Will he indicate some of the matters in respect of which I may knock on his door and those of other Departments to try to address the real difficulties that we are facing, and will face to an even greater extent in future?

I congratulate my hon. Friend the Member for Edmonton (Mr. Love) on securing this debate and on the passionate and tenacious way in which he put across his points about his constituency. He is one of my best honourable Friends in this House, and his passion for his constituency is unrivalled in this place. During his speech, he described some of the disparities in his borough of Enfield. I am familiar with such disparities, although of a different scale. The existence of severe pockets of deprivation in areas of some affluence is a familiar problem.

My hon. Friend said that job opportunities had been in decline in recent years; more positively, he talked about Enfield having the third highest grant in London. He spoke in depth about some of the challenges relating to incapacity benefit. Many of his constituents are lone parents, many are without work and many are low paid. My hon. Friend also mentioned the “sandwich effect” of growth in the economy of parts of central London and the challenge of the home counties that lie just north of his constituency. He also expressed concern that the economic advantage of the Olympic games may not result in the sort of long-term legacy that he hopes his constituency will gain.

My hon. Friend also provided a shocking statistic: there is 29 per cent. worklessness in one of his wards. I shall not pretend that in the coming minutes I can answer all the questions or resolve all the problems, but I will certainly have a go at setting out a framework for how the Government, in partnership with a passionate Member of Parliament, local government and other agencies, can, I hope, make a difference.

My hon. Friend has rightly campaigned vigorously on the issues that he has raised, particularly as the new indices of deprivation, published in December 2007, showed that the borough of Enfield had become more deprived since the publication of the previous index of deprivation in 2004. He has set out the pressures and inequalities that affect people living in areas of real deprivation, such as Edmonton. That matter has always been and remains a top priority for our Government.

As the index of deprivation clearly shows, the problem is not confined to London alone. Every region in the country, even the most affluent, includes pockets of deprivation and worklessness, which is a major—if not the major—contributor to deprivation. We have invested and will invest in various initiatives to tackle the multiple issues contributing to what we define as deprivation. For example, Enfield’s allocation from the neighbourhood renewal fund, worth £3 billion nationally, amounted to more than £11 million. In addition to the Department for Work and Pensions mainstream funded activity in the borough, other funds have been put in to support initiatives aimed at reducing worklessness.

As my hon. Friend pointed out, the neighbourhood renewal fund scheme has ended, but research showed that it had a positive impact on economic regeneration. Influenced by that evidence, last November the Government launched the working neighbourhoods fund—the first ever fund for local councils dedicated to tackling worklessness and low levels of skills and enterprise locally. I will not pretend that we will see instant returns, and he will know better than anyone in his community that some challenges are generational, and many others have to do with aspiration as much as anything else. Enfield is eligible for two years of WNF transition funds in 2008-09 and 2009-10. That equates to £892,000, which is to be targeted at tackling worklessness and skills-related issues.

On economic and business development, there is local activity that will bring jobs to the area. For example, my hon. Friend will be aware that Asda is about to create 300 jobs at Edmonton Green in his constituency. I understand that the local strategic partnership is commissioning a borough-wide strategy for employment and skills, and that to support people into work and overcome barriers to employment, it works with Haringey and Waltham Forest on the North London skills pledge. The borough also works with the “Reed in partnership” programme to help incapacity benefit claimants to get into work. That is another long-term challenge for his borough, and particularly for his constituency, as he rightly points out.

My hon. Friend spoke about the European funds. As he was the first to mention, a large amount of European funds have been invested in deprived parts of Enfield. The total grant awarded to projects delivered in the borough is just under £3.5 million. Additionally, the borough has benefited from a proportion of the grant that is awarded to projects sub-regionally where Enfield forms part of the delivery area. The overall joint total for that is £38,221,000, although unfortunately I cannot state exactly how much of that money goes to Enfield borough or his constituency.

My hon. Friend also mentioned the European regional development fund. Funding from its 2007 to 2013 programme, now managed by the European programme management unit in the London Development Agency, cannot be used to provide infrastructure, although it can support related supply-chain activity. As he will know, ERDF projects need to have match funding from elsewhere. As LDA funds are substantially committed, including for activity connected with the Olympics, I understand that only four out of 67 applications for funding submitted to the EPMU in the first ERDF application round in spring 2008 originated from other parts of the LDA. That was due to a lack of match funding.

The borough’s local area agreement, “Every Child Really Does Matter”, was signed off in 2006-07, and it included a set of stretching reward targets. If those targets are achieved by the end of the three-year period, Enfield will receive £9.6 million in reward grant. Those additional funds can be used to tackle deprivation. Again, the challenge is to reach out to people from an early age, and again, it is a generational challenge.

May I focus my hon. Friend’s attention on the London-wide aspect of local area agreements? Many of the problems that we face in Enfield are related to the wider London context—worklessness, for example. Many of the people coming into Enfield from other places and from other parts of the world do not have the skills necessary to gain employment and therefore remain workless. We need support to address the intensity of the problems that we face.

I entirely agree. In his speech, my hon. Friend issued a challenge—he said that he wanted to be able to come and knock on my door or on other doors in the Department. I would be delighted to take up that offer, to see what specific assistance we can give him.

Let me say a little about local area agreements, which my hon. Friend mentioned. The challenge and drive of the new local area agreements could be the key. As he knows, money is not the only solution to the complex challenges that his constituency faces. As a Government, we are making a real difference by enabling a change in the way key local service providers and communities work together to deliver more efficient and, I hope, better local public services. The partnership approach has to be the way forward, and I believe Enfield takes that seriously.

I mentioned the new local area agreements—the new performance framework for local government, which was outlined in the White Paper “Strong and Prosperous Communities”. That framework is about improving the quality of life and improving public services. It brings together national standards and priorities set by Government and local priorities developed by the local authority and its partners.

The Government have significantly increased local authorities’ flexibility in the use of their mainstream resources by moving more than £4 billion of grants into the new non-ring-fenced area based grant. That is the key—the fact that Government are encouraging local government to cut out some of the bureaucracy that it has had to face in the past and meet the challenges that most affect local communities. That will minimise the barriers to local authorities using their mainstream resources to support local priorities where they wish to do so. For Enfield and Edmonton, those local priorities are the ones that my hon. Friend eloquently described. From 1 April 2008, those funds are allocated on a three-year basis to maximise stability and provide longer-term certainty.

Area based grant is a general grant allocated directly to local authorities as additional revenue funding. It is allocated according to specific policy criteria, rather than general formulae. Local authorities are free to use all of that non-ring-fenced funding as they see fit to support the delivery of local, regional and national priorities in their areas. Of the £4 billion national area based grant allocation, Enfield will receive about £15.8 million. As central Government no longer dictate to the local authority how much should be spent on each initiative, strategic decisions about how to spend the money will be made at local level and depend on local priorities. I urge local authorities to work with and listen to local Members of Parliament when deciding where best to place those resources.

I know that time is running short so I will conclude my remarks by saying that my hon. Friend has made an important contribution and I will continue to do all I can to help and support him. Our door is always open to him.

Question put and agreed to.

Adjourned accordingly at one minute to Seven o’clock.