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Population Growth (Local Government Finance)

My hon. Friend is absolutely right. I am a strong believer in the contribution that the recent migrants have made to our national economy, but an important point to make on top of my hon. Friend’s point is that most of their contribution—in higher tax revenues and national insurance contributions—goes to central Government, not to local councils. Those local councils are being short-changed in every possible way because of that. To return to the Poles, so established is their influence in Hammersmith that the mayoral emblem of my borough has the Polish eagle on it. Polish newspapers and food shops are increasingly apparent. In fact, we now get Polish language-only call cards through the door—I have one here offering a magazine called Cooltura, which appears to be a Polish language magazine in the UK. There are Polish language newspapers, alongside the South African and New Zealand newspapers that one can pick up outside a lot of tube stations. I also have here a leaflet that we received only last weekend in Fulham, which is headed ““Polish professional workers”” and gives a complete guide to various services—carpenters, nannies and so on—which is a great thing. In addition, POSK, the Polish social and cultural association on King street in Hammersmith, is the largest Polish cultural institution outside Poland. We have a long record of welcoming people, so our message to migrants from the EU accession countries is clear—I speak not only for myself but for the new administration running Hammersmith and Fulham council: they are very welcome here, as they always have been. We are proud of the established eastern European community, which is an essential part of the fabric of life in our local community. We equally welcome the beneficial contribution that the new accession state nationals make to our local economy and our day-to-day lives. However, Hammersmith and Fulham council is being short-changed. With an increase in population comes an increase in the demands on local support services. We are starting to see pressure being placed on services such as refuse collection, parks, street cleaning and housing. Hammersmith and Fulham council wants to provide the extra capacity that the recent population increase requires, but it is struggling because Government funding mechanisms do not reflect recent immigration into Hammersmith. That has also been recognised by Dr. Olgierd Lalko of POSK, who has joined the council’s funding campaign and is quoted in the Fulham and Hammersmith Chronicle as saying:"““The Polish Social and Cultural Association recognises the enormous economic and social contribution that the Poles have made to Hammersmith and Fulham and we whole-heartedly support the council's endeavours to secure fair funding for the borough.””" The pressure on support services is likely to become more acute if Hammersmith and Fulham council receives an unfair settlement in the 2007-08 spending review, as is currently expected. The formula grant process uses population data that have been projected forwards from 2003. Recently published figures that look back to 2005 suggest that the projection for the borough of Hammersmith and Fulham understated our population by 2,673 persons—that is a lot of people for an area with a population of about 180,000. A provisional calculation of the effect of that underestimate indicates a loss for 2007-08 of about £448,000 in the formula grant alone. New data will be used for the 2008-09 settlement. Provisional figures show a considerable increase for Hammersmith and Fulham due to inward international migration. We hope that the new data will be right. The data used for the coming year need to be revised; the data currently in use and many of the methodologies urgently need revision. The ONS uses sub-national population projections, or SNPPs, that project forward the population for each year up to 25 years into the future. The SNPP for each year is calculated by ageing the population on from the previous year, applying local fertility and mortality rates to calculate the projected number of births and deaths and adjusting for migration into and out of the area. The population figures for financial years 2007 and 2008 use the 2003 mid-year population estimates as a starting point. Those figures are fundamentally flawed, as the mid-2003 statistics take no account of the huge increase in inward migration following the accession of the eight new EU members in 2004. Ironically, if the original population figure or the projections are wrong, the Government’s move to multi-year financial settlements, welcome to local authorities in many other respects, merely compounds the errors. Hammersmith and Fulham council reports that the number of its Polish residents shot up by a staggering 540 per cent. between financial years 2003 and 2006. In 2005, the number of non-UK national insurance registrations in the borough rose by 48 per cent., but obviously that has not been reflected in the ONS data from 2003. Meanwhile, the 2005 mid-year ONS estimate for Slough shows that its population should have decreased. Yet the data for NI registrations there showed an increase of 9,000 persons, only 150 of whom were UK nationals. Slough undertook independent research, which found that there are between 3,000 and 7,000 more people there than the ONS estimates. Meanwhile, Hammersmith and Fulham has seen its projected numbers for 2024 increase by 30,100 in just one year. That estimate looks forward just under 20 years; in just one year, it has changed by 30,000 for a borough of only 180,000. According to last week’s Local Government Chronicle, Slough estimates that unless the Government find a quicker way to incorporate migration into population estimates, it will lose out on a minimum of £15 million before the 2011 census corrects the figures. Although we are discussing local authorities, I might add that in 2001 my parliamentary constituency already had the second biggest constituency population in Britain after that of the Isle of Wight. That reflects the fact that at the last parliamentary boundary review in the mid-1990s, London’s population was still falling; now, of course, it is increasing very rapidly. Furthermore, current ONS figures fail to take account of short-term migrants. That is a major problem for many authorities, as such workers use local authority services. The 2008-09 local government finance settlement needs to take proper account of such migrants. ONS methodology for assessing international inward migration is also fundamentally flawed. The ONS data are at odds with other data sets, notably national insurance records, and need major review. Those flaws have been highlighted by the large inflow of workers from the A8 countries. I have also been made aware that a comparison between inward international migration data from the international passenger survey, the IPS, and non-UK national insurance number registrations between 2002 and 2005 in Hammersmith and Fulham—and doubtless elsewhere—shows a sudden 50 per cent. increase in non-UK new NI number registrations in 2005 that is not reflected in the IPS inflow data. That argument is slightly complicated—basically, those people are not being picked up. We believe that to be an indication that inward international migration statistics were underestimated for last year and the year before. However, I welcome the news that Hammersmith and Fulham is to be one of four local authorities chosen for case studies on how international migration is measured. Nevertheless, my council needs help now; I understand that the case studies will not be analysed before the next round of the local authority finance settlement. I turn to some of the extra expenses incurred by Hammersmith and Fulham council as a result of its growing population. All too often, the victims of the pressure placed on support services are the recent migrants themselves. Broadway, a local homelessness project, has recruited Polish-speaking volunteers. Broadway funds an employment project to assist people who have found it hard to get work, and it is seeing an increasing number of eastern European migrants. Many of the new migrants resort to sleeping in squats in large numbers or, if employed in the building trade, sleeping on site. An eviction from one property in Hammersmith pushed 30 people into short-term rough sleeping, behind Marks and Spencer in King street. They dispersed slowly over the next few days, but the cost that such operations have on our services is difficult to quantify. It is, however, very real. Earlier this year, Kensington and Chelsea borough council and Hammersmith and Fulham council together commissioned a joint strategic review of rough sleeper services. It revealed that 150 clients—about one third of the total number—at the Broadway project are Polish, and that 78 per cent. of them have no usable English. In our local schools, the number of children of eastern European white ethnic origin is rising year on year—a net increase of 40 to 50 children a year, compared with overall falling roll numbers of about 150 to 200 a year. Other grants will fail to pick up on our increasing and changing population. Due to the fact that, as recent arrivals, they will not have a prior attainment record, and because their families are not entitled to claim income support in their first year of residence, children of A8 nationals will not be able to be recognised as being from deprived backgrounds. Yet English is an additional language to most, if not all such children, and that requires extra spending. That is one of the reasons why our performance at key stage 1 is poor, although primary schools do wonders in lifting performance at key stage 2 to match the national average. Meanwhile, although they are not great in number, looked-after children from the A8 countries are costing the council some £300,000 per annum. There are impacts on other services too. Before I detail them, I restate that I personally believe that the nationals arriving in Hammersmith and Fulham from the A8 accession countries are a net benefit to our local area. They have probably greatly increased the tax and national insurance intake from my borough. However, my key consideration is that all of that money is going to the Treasury, and none to the local council. The council’s council tax base has not gone up as a result of the new population. It is not as if hundreds of homes are being built to accommodate it. Meanwhile, the ““no recourse to public funds”” budget for homelessness at the council is already overspent, not even halfway into the new financial year. That is a good indicator of the number of A8 accession families becoming destitute. Already, three households from A8 countries per week are approaching the council for assistance with housing. A recent one-day count of street drinkers in my borough found 107 people, of whom 38—36 per cent.—were definitely from the A8 nations. It was not possible to ascertain the nationality of all those counted, and the A8 contingent is likely to have been underestimated; more likely, it makes up close to half the street drinkers. Of course, the cost of delivering many council services will be roughly proportional to population numbers plus the impact of visitors. Such services would certainly include street cleansing, and might be deemed to include refuse collection as well. The population underestimates for Hammersmith and Fulham and other boroughs simply do not reflect the cost of providing those services. To conclude, all I am asking for is fairness in a system of central Government funding based on population figures. I hope that the Minister will recognise the impact that migration is having on the funding of local services in a small number of localities such as Hammersmith. I do not need to quote to him the words of the Prime Minister to the Liaison Committee on 4 July this year when he specifically recognised the enormous pressures that are put on local authorities by accession state nationals. Will the Minister respond directly on the pressures that are being placed on support services in Hammersmith and Fulham and in other councils? Crucially, will he accept that the council is right to request extra resources? The Prime Minister himself has accepted that some councils have added pressures as a result of the level of recent migration and that they should ask for more money. If the Minister cannot commit today to providing extra money, will he at least meet me and councillors and officers from the London borough of Hammersmith and Fulham? I am confident that we can work together on the problem. We are not asking for the world, just fairness and the resources to manage the recent migration from the EU accession states. I specifically ask the Minister to consider introducing gateway authority funding for councils that are facing such problems, including Slough and Peterborough, and my council, Hillingdon and others in London. In The Times business section today, the Governor of the Bank of England claims that the 2001 census is now next to useless because of uncertainty about migrant numbers. He says that that is making it difficult to steer the economy. If the 2001 census is not good enough for the whole economy, it certainly should not be good enough for local authority funding either.