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Local Government Finance

Dear me. It's the same old mantra, isn't it? We have had the debate on the deficit and the argument about whose responsibility it was. The hon. Gentleman will say one thing—I think Government Members get brownie points if they stand up and mention £120 million, and the Whips must be going, ““That's a good girl, that's a good lad. They'll go far in the Government””—but I am not going to rehearse the same argument today. That is why I confined my argument and contribution specifically to what is happening in my city. The Government cannot keep cutting without social consequences. My contention is that the formula that is being used is unfair to Liverpool, and the cumulative effect will be devastating. I have explained the transformation of our city, and I hate to acknowledge this, but it is common knowledge: Liverpool is the most deprived local authority in England. I wish it was not. Seventy per cent. of its areas are classed as falling within the most deprived 10% nationally in terms of health and disability, and 57% of the population has been assessed as ““employment deprived””. What is more, the city relies disproportionately heavily on the now-threatened public sector. If that does not make Liverpool extremely vulnerable in these difficult times, I do not know what does, yet the Government persist in hiding behind averages. The Government told us earlier that the average spending power reduction is around 4.4% nationally. Okay. I will state now—without, by the way, the authority of my local council—that we will accept the national average cut. We will take that now. If we are all in this together, we will take our fair share of the pain, but Liverpool is faced with a maximum spending cut of almost 9%, even after receipt of the transition grant moneys. It is absurd that while the most deprived community in the country faces the maximum level of spending reduction, the least deprived, Wokingham, faces a cut of just 0.63%. The Government can bandy around per capita figures until they are blue in the face, but the bottom line is that the areas facing the biggest spending squeezes—Liverpool, Manchester and Knowsley—are the poorest. So much for protecting the vulnerable. And so much for facts—not only did the Secretary of State have the audacity to claim on television recently that spending power in Liverpool would not be affected any more adversely than anywhere else, but he said that funding for supported people would be ““entirely protected””. That simply is not the case. Liverpool city council has advised that its supporting people funding has been slashed by 30%. But why let facts get in the way of an unsound policy and a soundbite? Despite all this, Liverpool city council has sought to work with Ministers in a bid to comply with Government diktat. In a spirit of collaboration and compromise—allegedly so de rigueur with the Tory-led Government—the council has requested flexibility on two specific fronts. First, we are asking the Government to grant us capitalisation permission to help to meet the estimated redundancy costs of £45 million. The council does not hold out much hope, however. As we heard earlier, capitalisation permissions have been capped at £200 million for the whole of England, and a recent letter circulated to local authority leaders held out little promise of a relaxation in that limit. That leaves Liverpool city council in the invidious position of being unable to afford to keep employees on or to let them go. Believe me, it is with a heavy heart that we are making these proposed redundancies—it is not a political game. Secondly, the council asked Ministers to rethink and recalibrate the front-loaded spending cuts, allowing it to spread them less abruptly and less painfully over the four-year spending review period. The Government are not prepared to budge on this, apparently. Instead, they will magnanimously reduce the maximum spending power cut from 8.9% to 8.8%. Thanks for the crumbs. This is a parlous state of affairs. Those who challenge the severity of local government cuts are the ones who are deficit deceivers. The so-called localism agenda is looking less and less like an experiment in local autonomy and more and more like a monumental exercise in fiscal buck passing—a wily move, but transparent. It is becoming increasingly apparent that, for all the slick rhetoric, this is not a reconstructed Tory party, but the same old nasty Tories with a Lib Dem human shield. This Government do not give two hoots about poverty, disadvantage or inequality.