Communities and Local Government/Environment, Food and Rural Affairs

One immutable rule of UK governance is that local government reorganisation and restructuring are always expensive—often very expensive. Few outside the House might realise that fully 2.5 per cent. of every VAT bill levied is what we might call the poll tax or community charge memorial fund. The rise in VAT in 1991 from 15 to 17.5 per cent. was introduced to dampen the effects of the change in local government finance that took place at that time. The transition costs associated with the Government’s new local government Bill will almost certainly exceed the £121 per person mentioned by my hon. Friend the Member for Meriden (Mrs. Spelman), which has been calculated in the Cambridge university study. However, I welcome in principle the streamlining of the performance and inspection regime, especially the much loathed best value and comprehensive performance assessments, although experience suggests that the implementation of these changes will be less than straightforward. I hope that you will forgive me, Madam Deputy Speaker, if I focus most of my comments on the capital, as I am a London Member. The Greater London Authority Bill purports to transfer significant powers from central Government to the Mayor and the Greater London Assembly. As there are two serving Assemblymen sitting on the Benches behind me, I should assure the House that I intend no criticism of the Members for Bexley and Bromley and for Croydon and Sutton in that other place. However, this proposed transfer of power raises the question of why we have a Government office for London in the first place. The duplication involved is quite breathtaking, and reflects the suspicion that the Labour Government have had of the present mayoral incumbent since 2000. Since the establishment of the Mayor and the Assembly in that year, spending on the Government office for London has doubled, and the number of its employees in 2005—the last year in which a parliamentary question on this matter was tabled and answered—was higher than before the new tier of London government came into play. Yet from the moment of his election, Mayor Livingstone began what has now been a six-and-a-half-year spending splurge, with countless advisers and policy and research officers producing endless reports, few of which concern areas of policy for which he has anything other than tangential responsibility. Naturally, none of this comes cheap. The council tax in London attributable to the Mayor and the GLA—the mayoral precept—has more than doubled in that period, from £123 in band D in 2000 to almost £300 today. Yet the Mayor of London empties not a single bin, cleans not a single street and runs not a single school, library or social services department. His budget goes on a huge public relations exercise alongside policing and the transport system, which seems scarcely fit for purpose to those who live in, work in and visit London. His failure to keep his eye on the financial ball is legendary. When not frittering away tens of thousands of pounds on abortive jaunts to Cuba or Venezuela, two countries not known for their support of the global capitalism of which London is surely the greatest exemplar, he runs a massive central bureaucracy at City Hall, which has recently been assessed in damning terms by its own internal auditor, the accounting firm Deloitte. The GLA is big and costly, with 673 permanent staff. The chief executive earns £175,000 a year while the average salary is some £50,000 a year. It has an annual wage bill of £35 million, yet there are also spiralling costs from the use of temporary agency staff. That wasteful, financially profligate story of incompetence is now the backdrop to Mayor Livingstone’s demanding yet more powers. That will all, of course, come at significantly higher costs. On Second Reading of the Greater London Authority Bill, I hope to address some of my more specific concerns about the proposals for housing and planning that my hon. Friend the Member for Meriden touched on earlier. It would be inappropriate at this juncture to rehearse a Second Reading speech on such matters, but there are some deep concerns from the 33 London boroughs about precisely which strategic powers on housing and planning are to be transferred to the Mayor. If we are to believe in localism, which seems to be the new buzz word on both sides of the House, that must mean that such matters should be kept at the most local level rather than being decided at City Hall, with its enormous bureaucracy covering 7 million people over the whole of the capital city. I have some sympathy with the view that making the mayoralty work properly requires broader strategic powers, and so I will look on some of the proposals with an open mind. However, the evidence from the current incumbent has been of a grotesque failure that risks mortgaging the future of Londoners for decades to come. I am afraid that nowhere is that more apparent than in the funding of the 2012 Olympic games. Typically, once the bid was won the Prime Minister’s interest waned. London council tax payers, presumably alongside worthy national lottery recipients, will have to foot the fast-rising bill. I say this with great regret, because I am a keen sports fan, but I rue the day that my city won the Olympic games bid. Many of us warned before the bid was won that the financial implications were not being properly thought through, yet Ministers derided my concerns at the time. What shocks me now is only that we face financial difficulties so quickly. Less than 18 months since we won the bid, the budget has doubled. We have had confusion over VAT, disputes over land ownership and the increasing likelihood that we will not be able to rely on a fixed price construction contract after the fiasco at Wembley stadium. We have had little indication that there will be a worthwhile legacy in the lower Lea valley to justify the enormous costs.