29 June 2010
Andrew Bridgen highlights the inequalities in local government grants in the past and calls on the Government to ensure that already lean and efficient local authorities are not penalised. He calls on the Government to remove the cap on council tax increases so badly managed authorities face the wrath of the electorate at election time.

Andrew Bridgen (North West Leicestershire) (Con): I want to start by adding my congratulations to my hon. Friends the Members for Dudley South (Chris Kelly) and for Wolverhampton South West (Paul Uppal) on their excellent maiden speeches. I am sure the rest of the House will join me in hoping that they will speak again in this Chamber in the very near future.

Today's debate is very important. As Members will know, local government financing represents approximately 25% of Government spending and is responsible for delivering many of the essential front-line services our constituents rely on. Such a level of spending therefore cannot be immune to the spending cuts forced on us by the parlous state of the finances we inherited from the previous Labour Government. The historic local government funding formula has for far too long been used, especially by the Labour Government, not as a political tool but as a political weapon-a weapon with which to beat the shire counties of England for having the temerity to vote Conservative.

Local government finance is a particular concern to me and my constituents, as my constituency suffers greatly under the historic funding regime. This year, each child in North West Leicestershire is having £3,888 spent on their education, compared with the £4,497 spent on each child in the city of Leicester-a difference of some £600 per child per year, and the disparity is increasing. Last year, the difference in funding was £550 per child.

Toby Perkins: Will the hon. Gentleman give way?

Andrew Bridgen: Let me make a little progress and I am sure the theme will become clear.

That funding difference is putting the children of North West Leicestershire at a major disadvantage. The two biggest senior schools in my constituency-Ashby and King Edward-are disadvantaged by nearly £1 million and £500,000 respectively each year compared with the city of Leicester. That simply is not fair.

Perhaps the biggest unfairness emerges when we consider the level of deprivation in North West Leicestershire. According to the last census, in one ward in my constituency 468 children were living in income-deprived households, yet their educational needs were funded by £600 less this year than were those of pupils in the city of Leicester. That cannot be right, and I look forward to the pupil premium redressing this unfairness.

Despite these funding shortages, Leicestershire county council is performing excellently and is a four-star council. According to independent inspectors,

"the Council is good at managing its money and making savings to spend on the most important services".

The independent inspectorate also comments on how

"Leicestershire County Council manages its finances well. Council tax is low compared with other areas and it provides a wide range of good and excellent services. This means it provides good value for money. In 2008/2009 it saved almost £11 million and it is on track to make further savings this year. These savings are then spent on improving services".

It is vital that well-run local authorities such as Leicestershire be looked at sympathetically when it comes to departmental spending cuts. Fit organisations have little fat to cut away; it is the bloated authorities that have been disproportionately funded and badly managed that should be looking at trimming their organisations. Perhaps they will decide not to do that, and to pass on the costs of their inefficiency to the long-suffering taxpayer. I urge us to remove the cap on council tax increases, which will allow them to do just that. Councils that choose to take that path will then expose their profligacy, waste and poor management to the wrath of the electorate, leaving them fully accountable for their actions-hopefully through the ballot box.

It is not just in education where my constituents are suffering the effects of the previous Labour Government's policies, but also housing. The previous Labour district council in North West Leicestershire, before being relieved of office in 2007-with the biggest swing in the country against Labour in those elections, but that is another matter-left the council housing stock in a lamentable state, rated as "poor", with no stars. Despite this, owing to Labour Government policy we have the ludicrous situation in which a third of all the rents we collect every year are passed back to central Government to maintain housing stock in other areas, despite the fact that a third of our housing stock is classified as "sub-standard", that we have elderly residents who are still forced to rely on solid fuel for heating and water, and that rents are increasing. We need to end this unfair and inefficient arrangement. I also look forward to councils being able to retain moneys raised by selling council houses, so that they can be re-invested in building new council houses in the district.

When the Opposition talk about local councils not building social housing, they might want to consider the fact that, in answers to questions in the last Parliament, the Government conceded to my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps) that the £200 million a year collected in local council rents nationally was not even spent on housing but simply entered the general taxation coffers. Despite this, they have left us with the largest deficit in the history of this country at £156 billion.

There is a comparison to be made between the financial management of the previous Labour Government and the management of North West Leicestershire district council when it was under Labour control. During those sad 33 years of Labour control, my constituents faced an above-inflation council tax rise, year in, year out.

Toby Perkins: The hon. Gentleman says that his constituents suffered under a Labour council for 33 years. If it was so terrible, why did they keep voting for it?

Andrew Bridgen: I think we needed to have a shake-up of the Conservative party in North West Leicestershire, which came in 2007. When the people of my constituency make their minds up, they make their minds up, and we had the biggest swing against Labour in those elections, as I pointed out.

Even in the year when it was thrown out of office, the Labour council increased council tax by 4.1%, and its performance was rated as weak and some way behind that of comparable councils. Three years later, the situation is somewhat better. The council is now rated adequate and is improving year on year. This has not been achieved by the Labour methods of tax and spend. As Winston Churchill said, for any society to believe that it can tax itself to prosperity is as ridiculous as a man standing in a bucket and believing he can lift himself up by pulling on the handle. The Conservative-controlled district council has introduced below-inflation increases of 2% in 2008 and 2009, and this year has introduced the sort of increase that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) would doubtless describe as "a 0% increase". Much to the relief of local residents, the council is improving services through prudent financial management and by trimming away the fat of previous administrations.

The east midlands and Leicestershire have fared little better under Labour on other essential public services. On policing, based on the 2009-10 budget and the 2008-09 crime survey, the east midlands region has the lowest grant relative to the number of crimes in the whole of the UK. The east midlands receives just £1,330 in grant for every crime whereas the north-east region receives an extra £800 per crime to deal with the offences in its region. Let us consider what happens with other essential services. The combined fire service of Leicester, Leicestershire and Rutland is the lowest funded per capita of any shire county fire service in England. Those and many other inequalities must be borne in mind when funding decisions are made.

I must reiterate that the fat, bloated local authorities are the ones that need to put their house in order when it comes to the inevitable cuts, which must be made this year, next year and for several years to come because of the awful financial legacy of the Labour Government. In conclusion, all I ask on local government financing is for a fair settlement for the east midlands, for Leicestershire and for my constituency of North West Leicestershire.

7.51 pm