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Local Government Finance

When I spoke on local government funding in December, Government Members accused me of pre-empting the final settlement and of scaremongering. They superciliously lauded my passion but suggested that I await the Government's definitive announcements before jumping to conclusions regarding how Liverpool would fare. Well, I have done that. The formula has been decided, the figures have been published, the maths has been done, and I repeat vociferously now what I said back then. Not only will the scale, pace and nature of these draconian measures imposed in the name of fiscal restraint have a devastating impact on Liverpool, but in the wider scheme of things, the cuts will prove an utterly false economy. I stated in December that Liverpool would be disproportionately hit, and I repeat that claim today. I should declare at this point that I am still a sitting Liverpool city councillor, at least until May. At Prime Minister's questions earlier, a Tory Member had the temerity to say ““Shame on Labour councillors”” when the Prime Minister tried to blame Liverpool for his big society failures in the city. It did not take long for the malevolent Tories to revert to type and put the boot in to Liverpool, did it? That comment shows the Conservatives' lack of understanding, because it is not just Labour in Liverpool that is saying that the Tory cuts will savage our services. The whole council—Labour, Green and Liberal and even the Liberal Democrats, who used to run the council—is up in arms. The books are there for all to see, so I am happy to invite the Secretary of State to come and have a look at them to see the dilemma that he alone has created. We in Liverpool now know that we will have to save a budget-busting £92 million in the financial year ahead, and the council has very little, if any, room for manoeuvre. For all its valiant efforts to balance the books, both jobs and front-line services are to go. As we have heard, some 1,500 redundancies are predicted over the next two years. Before hon. Members shout me down, I fully acknowledge that Liverpool is not alone. Local authorities up and down the country are facing crippling cuts, but I shall explain what is particularly galling about the situation in which Liverpool city council finds itself. In December, the Minister for Housing and Local Government was reported as pontificating:"““If councils share back office services, join forces to procure, cut out the crazy non-jobs and root out the wild over-spends then they can protect frontline services.””" The implication was clear: profligate and irresponsible local authorities needed to get their act together. The Minister was preaching to the converted in Liverpool. Having long been tightening its purse strings, it has achieved a total of £70.4 million of savings in the last three years, about £40 million of which was saved in the current financial year under a Labour-controlled council. How Liverpool managed that might be of interest to the hon. Member for Harrow East (Bob Blackman). Liverpool did it by making proven efficiency savings in management, administration and back office services, and through economies of scale achieved by sharing, outsourcing and collaboration. Simultaneously, the authority has managed to reduce and stabilise council tax. In fact, our approach was commended in this very House by the Secretary of State. Liverpool has been there and done all that, and is both able and willing to continue in the same vein, but it cannot perform miracles. That is why the Prime Minister was wrong today, and why Liverpool city council was absolutely right last week to refuse any longer to prop up the Government's sham, big society agenda, which was always a cover for a cynical exploitation of community and voluntary tradition to obtain public services on the cheap. What is most objectionable is the way in which Ministers have banged on about protecting the most vulnerable communities, believing, it seems, as my right hon. Friend the Member for Don Valley (Caroline Flint) says, that if they say something often enough, people will eventually believe it to be true. Well, not in Liverpool they won't. Our city is a city transformed. We are a great city do a business in, and once again I make the offer to the Tories to hold their party conference in Liverpool so that they can see what a great city it is first hand, just as the Lib Dems did last year and the Labour party will do this year.