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Local Authority Funding

Volume 519: debated on Thursday 25 November 2010

3. What representations he has received from local authorities on likely changes to funding from his Department since the publication of the comprehensive spending review. (26201)

I have received a number of representations about the challenging but fair settlement for local government. We will shortly announce details of our proposals for funding local authorities in the provisional local government finance settlement.

The Secretary of State’s failure to stand up for councils in the CSR is having a devastating impact on jobs and services in Rochdale. Provision for the homeless, community centres, adult care and many other services are being cut. The situation is so bad that six Liberal Democrat councillors resigned last week, and yesterday the Liberal council leader stood down. Because of the Secretary of State’s cuts, the local authority is in turmoil. When will he stand up for local government?

I should have thought that the hon. Gentleman would congratulate the coalition Government. We recognise that a number of authorities are more dependent on grant than others. We face a particularly difficult task in relation to Rochdale, as we must bridge just short of £6 million that the Labour Government took from the working neighbourhoods fund, but we will certainly seek to provide that cushion. My advice to the hon. Gentleman is “Go back to Rochdale, put a bit of lead in their pencil, and let them get on with protecting front-line services rather than fighting among themselves.”

Does my right hon. Friend agree, on the basis of the representations that he has received from local authorities, that every progressive authority in the country will have planned for the reductions in expenditure? Does he intend to ensure that councils are able to freeze council tax following the years of rapid increases under Labour?

Absolutely. What was going to happen to local government was well showcased. It was clear from the previous Chancellor’s statement in autumn 2009 and the Budget earlier this year, before the general election, that at least £5 billion was coming out of local authorities and that that would be front-loaded. I would therefore expect prudent local authorities and prudent chief executives to have taken the necessary precautions.

The worst aspect of these cuts to local authority budgets, which amount to 28% in real terms over the next four years, is that they are front-loaded. The hardest hit councils are facing reductions in their grants next year of 14%, 18%, 20% or even more. That means they have to plan their service cuts and redundancies now, so may I urge the Secretary of State to think again about the scale of these cuts or to alter their phasing so that councils are not forced to take what will be very damaging crisis measures?

“As we look forward”, regeneration spending is

“not the biggest priority we face”

as there are “other competing priorities.” I apologise: perhaps I should have made it clear that those were the words of the now Leader of the Opposition, speaking on the Radio 4 “Today” programme on 12 April, just before the general election. That is the dilemma. The Opposition have a blank piece of paper. They oppose everything when they know, as we know, that they were going to impose £5 billion of front-loaded cuts on local authorities.

May I ask the Secretary of State to join me in congratulating my council, Dudley metropolitan borough council, on engaging in discussions with Wolverhampton, Walsall and Sandwell councils about rationalising services and reducing back-office costs without affecting front-line services?

I have to say that that is the future of local government. We expect local authorities to merge services and to protect the front line. Prudent councils are doing that. Councils that are more content to use the poor and the vulnerable as a battering ram against the Government will seek to protect the centre and not seek to protect front-line services, whereas good councils will protect the front line.